Lux Investing
Is GE a good company to invest in with a DRIP?
I was looking to start investing and a DRIP plan sounds good to me. GE is a large diversified conglomerate that isn't likely to fall apart anytime soon. They will grow but they aren't a high growth company. I still have to look up what they have been paying for dividends though. If not any other companies? Maybe CSX?
Public Comments
- GE is a good company. That said I held GE stock from 2001 to 2007 w/ DRIP. Total return was less than 3% per year. I sold right before the recent market down-turn. GE has alot to gain from the global growth trend, but, we are in a bear market and a recession, so almost all companies are going to do down in the short term. In my humble opinion. I'd consider staying in cash or maybe even some of the short ETFs like QID SDS DXD DOG etc. till this current mess is over. It's a bubble, the last bubble (tech) went from a peak in 2000 to a low in 2003 and finaly got back to break even in 2007. These things take time.
- We won't have the sort of market collapse that we had from 2000 to 2003, or if we do it will be much shorter in duration. The simple reason is that stocks in 2007 were not remotely as overvalued as they were is 2000. They are both good companies. CSX is the hotter company right now, which is both good and bad. CSX just put in a great earnings report, so its stock price just went up a lot. But this market is so bad that it might come down quite a bit. Also, Warren Buffett has been buying railroads, so the whole industry is more expensive than it would otherwise be. And the dividend is rather low. Still, it is a good company. GE's stock price is down and might go a fair bit lower, and its dividend yield is pretty high. So I would buy some right here, but buy in smaller pieces anticipating that it may go down more. The GE div. is $0.31 per quarter or an annual yield of 3.65% at its current price of $34. This is a good choice for a very long term holding in a DRIP for the reasons you mention. Warren Buffett owns it too. Don't put all your eggs in one basket. Other great dividend paying companies are PEP, VFC, MO, COP. PEP (Pepsico) is interesting because the div. yield is medium small, but the div. growth rate has been quite high. So that over a long time, the eventual dividend yield based on today's investment, will be very high.
