About a month ago, I talked about 4.00% being the magic number for General Electric (GE) in a number of ways. One of those ways was the annual dividend yield, because the stock's fall was putting this number in play. Despite a huge market rally on Monday, GE shares actually declined, with the stock less than 75 cents from this key dividend level at the day's low. Will this be the point at which investors see value from the name again?
Last September, the board declared a $0.24 quarterly dividend, at which point the forward yield was 3.95%. Unfortunately, this became a misleading number for GE because as the stock fell, more and more concerns built up about a dividend cut, so it was hard to use that payout rate to project a yield. Things reset in early December, when the current rate of $0.12 was declared, and the chart below shows how that yield has fared on a closing basis since.
