Due to GE's massive transformation efforts, Illinois Tool Works and 3M may be better options for some investors.
Dividend stock investing goes beyond selecting the stock with the highest yield. It requires analyzing the health and prospects of the business to find out whether the company can pay and increase its dividend. The best dividend stocks are financially healthy, can afford to increase their dividend in the future, and the underlying businesses remain on track to continue performing well in the future.
On paper, General Electric (NYSE:GE) fits many of these criteria. It pays a 2.9% dividend, is financially stable, and remains committed to increasing its dividend in the future. However, the concern is that GE is currently in the midst of a massive transformation to divest the majority of its financial services business, GE Capital. Management's goal is to turn GE into a highly focused industrial company that can drive stronger earnings growth.
There are a lots of moving parts to this plan...
Source: The Motley Fool