GE Cuts Its Dividend

Recently, I mentioned the market’s guess that General Electric was soon going to cut its dividend. I had been under the impression that the company was doing all it could to stave off a dividend reduction. Today we learned that GE has, in fact, reduced its dividend. This is GE’s second dividend cut since the Great Depression. The quarterly dividend will fall from 24 cents per share to 12 cents per share.

I don’t have a strong opinion of whether this is the right or wrong thing to do. I suspect it’s the correct decision. But I’m more struck that we’re talking about GE here, and we’re talking about this during a bull market and economic expansion.

GE also cut its dividend in 2009, but back then, everybody was doing that. This time is different. The company now says they expect to make $1.00 to $1.07 per share next year. That’s nearly half of what they had been expecting less than a year ago.

This is an important lesson for all investors. In this game, there are no guarantees. Misfortune can strike anybody at any time.

Posted by on November 13th, 2017 at 10:43 am

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