General Electric (NYSE:GE) is increasing its available cash quickly, and estimates by the end of 2010 they'll have about 25 billion on hand.
Plans for the cash are to buy back some of its stock by the end of 2010, and to increase its dividend in 2011.
General Electric CEO, Jeffrey Immelt, also is looking to grow through acquisitions, which the increased cash will put them in a strong position to make deals.
Immelt has said that earnings for the company will explode over the next couple of years, making available cash even higher.
Although some analysts have projected the increase of the dividend at GE to be around 12 cents a share, Immelt said the company will wait until the end of 2010 before making a decision and announcement. At this time the dividend is 10 cents a share. GE had cut its dividend in February 2009 from 31 cents to 10 cents, the first dividend cut since the Great Depression.
That implies that even though GE believes they're going to generate strong earnings, the growing problems with EU sovereign debt and concerns over combating inflation in China has changed the demand equation for materials and products, and could have adverse effects on GE and a number of companies with large exposure in both regions.
On the acquisition side of things, Immelt said he's looking for smaller firms, with expenditures in the $1 billion to $3 billion range. He did add if a quality opportunity came up that was over $3 billion, it would be taken into consideration.
Sectors he would be interested in would include health care, oil and gas, aviation and clean energy.
GE is also going to take some of the available cash and retire the preferred shares sold to Berkshire Hathaway, which were valued at $3 billion.
The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com
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