General Electric (GE) was once one of our favorite considerations. A number of years ago, the company retained a sprawling industrial manufacturing base and considerable exposure to the healthy healthcare and aerospace end markets, and it had been working to rid itself of its financial operations, which wreaked havoc on its dividend during the Great Recession. What could be bad about this? As it turns out, however, management may have been too optimistic about its capacity to return cash to shareholders, shrinking the company so aggressively with dividends and buybacks that when the dust settled from all its net divestitures, industrial free cash flow became too tight to handle its existing dividend payment.
