2013 was an exceptionally strong year for General Electric (NYSE:GE), with shares rising close to 37%. For investors who are expecting an encore this year, they won't be empowered so far, as GE shares are down in 2014. Anyway, for the long run, GE can proceed with its solid run and addition in a slow and steady way. In this article, I will focus on two of the numerous reasons why General Electric could keep on being a solid investment going ahead.
Profiting from smart homes
Smart homes are picking up energy as a result of innovative enhancements. Customized and cloud-oversaw applications are developing exponentially with a decrease in costs, and GE has officially forayed into this business. Analysts accept that the business for smart homes might multiply by 2018 to be worth $71 billion. Products like security, lighting, amusement, checking, vitality administration systems, and so on are key application areas in smart homes; and GE's item portfolio consists of these products, empowering the organization to profit from this developing business.
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- GE 15-Year Financial Data
- The intrinsic value of GE
- Peter Lynch Chart of GE
To tap the smart homes market, GE and Quirky have propelled various products such as Spotter (multipurpose sensors), Nimbus (smart dashboard with clock), Pivot Power Genius (Smart Power Strip) and Egg minder (smart egg tray).
GE has also propelled various home security products that should help it profit from security requirements in the smart homes of tomorrow. The home checking system offered by GE is a bundle of products like security alarms, surveillance Polaroid systems, wireless lighting system, and so on that includes GE Z wave wireless lighting and control systems
Solid state lights
An alternate business sector where GE can profit is LED Lighting. The size of the LED market in 2014 is anticipated to be $8.3 billion. GE is an established brand name in accepted and LED lighting solutions, and has been spreading its foot shaped impression with solid state light solutions. Headed lighting is also a paramount item for smart homes, enhancing GE's presence in smart homes further.
The LED business is on an upward pattern because of various reasons. A significant lessening in vitality costs with diminished greenhouse-gas emissions is one of the principle reasons behind the development of LED lighting. Savings of $250 billion are normal through the following two decades by switching over to LED lights.
Headed lights have also picked up appropriation in the automobile industry. The automobile lighting business is anticipated to be worth $25.36 billion by 2014. GE, with its extensive variety of LED lights for automobiles, can see a boost in revenue as a result going ahead. Besides, various automobile manufacturers have started adjusting to LED lights because of low vitality consumption.
Additionally, after might be some of the reasons that can boost LED lighting sales for GE in 2014.
Value strategy: Reduced value stimulates interest for LED lights. GE as of now is as of now retailing the 60-watt comparable LED globule at $11. With innovative enhancements and the presentation of cost saving initiatives, GE can always be a victor in the value war and remain significantly better than the competitors.
Government subsidies: GE LED lamps have acquired Energy Star ratings that should help it profit from various government subsidies. In North America, LED lamps that are secured under the Energy Star discount have witnessed quick development. In 2013, 74% of the U.s. was secured by An Active Lighting Rebate Program, giving GE a solid runway for development.
Keen lighting solutions: GE as of now has worked together with the legislature for giving wise open air lights. This year, the city of San Diego worked together with GE and anticipates conveying aggregate vitality savings of $250,000 to the nearby government.
Acquisitions & channel partners: In the past, GE has either procured or held hands with various LED lighting companies and LED fixtures manufacturers. These acquisitions and partnerships should profit GE in establishing a more extensive foot shaped impression and create new customers to boost sales.
Brand picture: This goes of course for an organization which is in excess of 100-years-old, has a worldwide foot shaped impression, and a wide arrangement of products and services.
GE looks like a marvelous investment from all angles. The organization has a strong dividend yield of 3.50%, a modest trailing P/E of 20, and is foraying into development markets such as smart homes, industrial web, and LED lighting. So, investors searching for a safe and sound approach to profit from diverse development markets should doubtlessly examine GE.