Last week the new CEO of GE came with a new turnaround plan for this 125-year-old conglomerate.
In this plan GE slashes its quarterly dividend by 50% to 12 cents a share. (ouch)
John Flannery – GE CEO: “We are focused on driving total shareholder return and believe this is the right decision to align our dividend payout to cash flow generation … With this action and others that we will be discussing this morning, we are acting with urgency to make GE simpler and stronger to drive growth and create more value for our shareowners.”
The shares are down for more than 35 percent for this year. The new dividend policy effectively reduces GE dividend yield from 5.2% to an estimated 2.7%. GE has paid a dividend since 1899 and has only cut it twice: in 1939 and in 2009. This new dividend cut, their third in more than a centery, hurts.
Okay the dividend cut was not a surprise. More and more articles and blogs were writing about a possible dividend cut since a couple of weeks. Because GE takes just 1% of my Vrijheid Fonds, I decided not to act before the new financial numbers.
My Vrijheid Fonds consist of 60 shares of GE. This dividend cut will be first felled in January 2018. My total dividend loss for 2018, due to the GE dividend slash, is approx. €30.
In the next few months I will do a new evaluation of GE for my Vrijheid Fonds.
Do you own GE? What is your action after the dividend slash?
I like to hear from you.