General Electric CompanyGE

Morningstar Rating

Stock Research and Analysis

by Daniel Holland

General Electric positions itself to be a leader in whatever market it competes in. After shedding underperforming businesses during the past few years, the firm has energy infrastructure square in its sights. We believe that GE will emerge as a leader in the power infrastructure market, which will be the backbone for the firm's growth. Read more

Bulls Say

The economic stimulus package heavily provides incentive for activity in markets that GE supports.

NBC Universal's joint venture Hulu.com recently picked up Disney DIS as a partner and is quickly becoming a formidable response to the threat of Internet-based media content.

GE's global presence gives it access to more information about the direction of economic activity than other firms, giving the company an advantage in getting its feet on the ground in emerging economies.

A number of GE Capital's competitors are struggling due to the rise in delinquencies in residential and commercial real estate, leaving a less crowded competitive landscape for GE. Read more

Bears Say

Efficient manufacturing programs like Six Sigma and lean manufacturing have been around long enough for other firms to successfully implement and catch up to GE, reducing the strength of GE's cost advantage.

GE's bank portfolio still has more than $100 billion on non-U.S. consumer loans outstanding which will keep charge-off rates high for the foreseeable future.

By shifting to long-term financing, GE is opting for more expensive financing, which will pressure GE Capital's profitability.

Oversight by financial regulators is imminent and GE Capital will more than likely have to retain more of its capital going forward as opposed to giving it back to the parent company. Read more

Strategy

GE focuses on producing complex, highly engineered, big-ticket items such as jet aircraft engines and electric power plant turbines. The company aims to serve extremely large markets with ample opportunity for market share expansion. Read more

Management

GE is known for the strength and depth of its management team, which has a long history of creating value for shareholders. As testament to its depth, several former executives have gone on to lead other large companies. CEO Jeff Immelt took the reins from the legendary Jack Welch just days before 9/11, and his tenure to date has been characterized by a stronger balance sheet, significant acquisition spending, and the divestiture of most of the firm's insurance and plastics businesses. Read more

Profile

General Electric is organized into five segments: technology infrastructure, energy infrastructure, NBC Universal, consumer and industrial, and capital services. Financial services accounted for 43% of the firm's profit in 2008. Read more

First Name

Last Name

Email Address

Zip Code

Create Password

Verify Password

(6-15 characters; case sensitive)

What is your occupation or job title?

Select...

Your registration indicates agreement to the terms of use.

What's Inside GE Capital?
Watch more