Energy and Power
GE: The ‘Must Own’ Stock For A Global Turnaround
General Electric (GE) is active in a wide variety of market sectors, focusing on energy, technology infrastructure, capital finance, and consumer and industrial products. The company is paving a solid way to the future with its advancing technologies, and with its footprint extending almost over the entire globe, I believe GE will trade higher by 2013. Here is what I found.
GE is very active in and dependent upon the euro zone, where it goes head to head with Siemens (SI). Siemens is currently trading around its 52 week low, while GE is trading around its 52 week high. Analysts do not believe this discrepancy to last, as GE prices are expected to decline in coming weeks, mainly because of its work in finance and the European debt crash. GE is currently looking at 50% more revenue than Siemens, but it has 18% more debt.
This is all relative, as General Electric is still a monster powerhouse in the global economy. The company is trading at around 14 times earnings (Siemens is trading around 10 times earnings). Between the two, GE is more likely to see some drops in prices due to a higher valuation and more highly leveraged balance sheet. Even with drops, however, GE is still an industry giant with fantastic potential due to its dividend, upcoming projects, and overall financial numbers.
Despite production in various sectors of the market, General Electric had a respectable return on equity last year at 10.6%. Analysts estimate that in 2012 General Electric will have an EPS of $1.82 a share. To continue reading, click here.