General Electric’s Dividend Hike of 5%

Earlier this month we picked GE to be one of five Dow stocks to boost its dividend before the end of the year. Our estimate for a one penny raise was right on target, following the partial spin-off of its GE Capital into Synchrony Financial (NYSE: SYF) and a promise to distribute the rest of the stock to GE shareholders next year. GE’s dividend yield was already 3.4% before the increase.

The announcement did not pull the shares into positive territory in Friday’s trading session. Shares are down about 1% at $25.17, in a 52-week range of $23.69 to $28.09. Friday’s drop in the DJIA is slightly worse, with the index down 1.1% and just four of 30 stocks trading higher.

GE needs the energy markets to stabilize, preferably with crude selling for more than $58 a barrel. The company has invested serious money in the oilfield equipment business, and an expected slowdown in drilling is not something GE wants to see next year. A crude price closer to $90 than to $60 could turn GE into the Dow’s best-performing stock of 2015.

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