A few days ago, there was good news for investors in General Electric (GE) when the finance arm of the company GE Capital won the approval of the regulators to return some of its profit to its parent. The move came ahead of the expectation of many analysts who thought that there would be no approval until 2013 and that even this would depend on the number of uncertain variable factors. Now there is reason for GE investors to hope that the stock buybacks will be speeded up and the dividend will be raised. The finance arm had emerged as a concern for many investors during the financial crisis and led the company to reduce its dependence on the finance arm and pay more attention to the industrial activity which is its core.
Now that the Fed has confidence in the financial position of GE Capital, a special dividend of $4.5 billion is planned for later this year. Analysts point out that this removes a large cloud that has hung over GE and will awake new interest in income investors. GE has traditionally received a dividend from its finance arm of the practice was discontinued following the financial crisis in the fourth quarter of 2008. Now the board of GE Capital has declared a dividend of $475 million which is 30% of its first-quarter earnings in advance of the special dividend. The GE board will consider its next move is on dividends in December.To continue reading, click here.