I guess it's a symptom of the cash crunch. I'm sure if you really dug into it you would find this trend with several firms under cash pressure.
No digging is necessary. We all know GE isn't alone in the cash crunch boat
But the soothing part is that there are other boats enjoying a little piece of paradise in this rough sea. One stock I'm considering is integrated giant, Exxon Mobile. It's maintained a near debt-free balance sheet for the longest time, and has eased its shares outstanding from 7.0B to 5.0B over the past 9 years. In fact, with prices low, XOM is
accelerating their buyback program devouring $8.85B of its market cap in the fourth quarter alone; how many companies can afford to do that?
Exxon's dividend yield is only 2.5%, but for every dividend dollar dishes out, Exxon is buying back more than 4 bucks worth of shares. So, the total yield (dividend + buyback) is well over 12%.
I don't know where XOM will be in 5 years, but the math is simple. Stock is down a third from a year ago, but as long as the business keeps on generating an enormous amount of free cashflow and buying back 7-10% of shares with the cash, you'll get your working capital no matter what the market price is.
GE and XOM have very similar PE ratios, both trailing and forward. Wouldn't XOM be the better choise? I know they're in different industries, and the comparison would be apple-to-orange, but hey, let's compare apple-to-orange.