GE ups dividend for fourth time in 18 months

Stock Market Predictions

(Global Markets) - General Electric Co (GE.N) said on Friday it is raising its quarterly dividend by 13 percent, marking the fourth time the largest U.S. conglomerate has increased the payout since July 2010 and sending its shares up 3.6 percent.

The series of increases -- totaling 70 percent -- were intended to signal that the world's largest maker of jet engines and electric turbines had recovered from the 2008-2009 financial crisis, when it slashed its payout to conserve cash.

But Chief Executive Jeff Immelt has cautioned investors that the Fairfield, Connecticut-based company aims to return to its historic practice of raising the dividend once per year, in line with earnings growth. GE aims to pay out 45 percent of earnings to shareholders through the dividend.

"Our balanced and disciplined capital allocation plan has enabled us to achieve important goals including increasing dividends, redeeming the preferred stock held by Berkshire Hathaway, redeploying our (NBC Universal) capital to high growth energy acquisitions and investing in organic growth platforms," Immelt said in a statement.

GE's board voted to raise the quarterly dividend by 2 cents per share, to a rate of 17 cents, payable on January 25. It remains below the 31 percent pre-financial-crisis rate.

GE shares were up 3.6 percent to $16.89 in midday trading on the New York Stock Exchange.

When the company reported third-quarter results, it told investors it expects to grow profit at a double-digit rate next year. While Immelt is likely to offer more detail on the company's expectations in a meeting with investors on Tuesday, GE no longer provides shareholders with specific per-share profit targets, a practice it abandoned during the financial crisis.

GE in October bought back the preferred stake it had sold to Warren Buffett's Berkshire Hathaway Inc (BRKa.N) for $3.3 billion plus unpaid dividends.

(Reporting by Scott Malone in Boston; Editing by Derek Caney, Dave Zimmerman)