Spinoff spotlight: General Electric Co.

Article Excerpt

GENERAL ELECTRIC CO. $80 remains a hold. The conglomerate (New York symbol GE; Manufacturing sector; Shares outstanding: 1.1 billion; Market cap: $88.0 billion; Dividend yield: 0.4%; Takeover Target Rating: Medium; www.ge.com) plans to break itself up into three separate companies. In early 2023, GE will hand out shares in its GE HealthCare business (it makes X-ray equipment, MRI and ultrasound scanners) as tax-deferred dividends. The company will retain a 19.9% stake in this business. GE will also combine its renewable energy and power businesses into a single entity. Its products include turbines and related equipment for gas-fired and nuclear power plants, plus equipment for wind farms. It will then spin off 100% of this business (called GE Vernova) to shareholders in early 2024. The remaining firm (called GE Aerospace) will focus on aviation equipment such as jet engines and aircraft electronics. However, pandemic-induced supply chain shortages continue to hinder GE’s deliveries. Higher prices for steel and aluminum will also slow its earnings growth for the rest of…

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