Filed under: Major movement, Analyst upgrades and downgrades, General Electric (GE), Stocks to Buy
General Electric Co. (NYSE: GE) shares gained 4.3% by 1 p.m. following an upgrade from Merrill Lynch to Buy from Neutral. Analyst John G. Inch said GE seems to be a good defensive play in today’s climate and that its range of businesses and large global exposure (more than half its revenue comes from outside the U.S) will help it weather a U.S. recession.
Just as GE’s finance units are unlikely to record massive writedowns the way other banks do these days due to their subprime exposure, so are its other units less exposed to the slowing U.S. economy. With an above-average dividend yield of 3.5%, and divisions like health care equipment and electricity generation that will not be hurt by a weakening economy, the stock is positioned as strong defensive play. Not only that, but Inch expects GE to be more profitable this year than the rest of the S&P 500, which is inline with GE’s own forecast of 10% profit growth for 2008.
By the way, Jim Cramer today also mentioned GE as a stock with a high dividend yield, backed by a company with a good business, and which is likely a bargain now.
Continue reading General Electric (GE) — a good, defensive play
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