Ask a Fool: Why Did General Electric Cut Its Dividend, and Are My Other Dividend Stocks Safe?
General Electric (NYSE: GE) cut its dividend in half in order to save money. The company hasn't been making enough money to cover its dividend recently, and the cut will save GE more than $4 billion per year. GE's free cash flow has declined for six years in a row, so cost-cutting measures had become necessary.
There's no way to predict with 100% reliability whether a company will be able to maintain or grow its dividend payments in perpetuity, but there are a few things that can indicate your dividends might be in trouble.
The most important dividend-related metric to know is the payout ratio. This is simply a stock's dividend, expressed as a percentage of its earnings. For example, if a stock pays $0.50 in dividends this year and earns $1.00, its payout ratio is 50%. A payout ratio of 60% or less is generally considered healthy, and 100% or more implies that the stock isn't earning enough to pay its dividend.
Source: Fool.com
General Electric Co. Stock
The stock is an absolute favorite of our community with 35 Buy predictions and no Sell predictions.
As a result the target price of 162 € shows a slightly positive potential of 7.64% compared to the current price of 150.5 € for General Electric Co..
