General Electric Co. (NYSE:GE) (1.1%) (GE – $29.62 – NYSE) is an industrial conglomerate based in Fairfield, Connecticut, with leading positions in power, energy, healthcare, and aviation equipment, services, and financing. GE has materially downsized its finance business through the 2014 spinoff of Synchrony Financial and the sale of most of its finance verticals. Financial businesses will be retained in healthcare, energy financial services, and aviation to support key industrial businesses. The company recently became the first institution to be de-designated as a Systemically Important Financial Institution (SIFI), providing more balance sheet flexibility and allowing the company to buy back upwards of $50 billion of stock. On the industrial side, GE is integrating its $10 billion acquisition of Alstom’s power assets, broadening its scale and capabilities. It is also ramping up production of its efficient H-turbine for power plants and its LEAP engine for next generation fuel efficient narrowbody aircraft, while investing in 3D printing capabilities to simplify the associated manufacturing. On the services side, GE is aggressively building out its digital capabilities, focusing on the remote monitoring and optimization of its installed base. The transformation of GE, now almost complete, is creating a focused industrial company capable of driving high single digit earnings growth while paying a progressive dividend.
From Mario Gabelli (Trades, Portfolio)'s Equity Income Fund 3rd quarter 2016 commentary.
