In a long anticipated move, General Electric Company (NYSE:GE) on Monday lowered its quarterly dividend payout to the lowest levels seen since the fallout of the financial crisis.
The industrial giant, which has struggled in recent years amid rising pension obligations and weaker cash flow, slashed its dividend to 12 cents per share from a previous 24 cents. The last time GE’s dividend was that low was back in 2010.
The company commented via press release:
“We understand the importance of this decision to our shareowners and we have not made it lightly. We are focused on driving total shareholder return and believe this is the right decision to align our dividend payout to cash flow generation,” said John Flannery, Chairman and CEO of GE. Mr. Flannery added, “The dividend remains an important component of GE’s capital allocation framework. With this action and others that we will be discussing this morning, we are acting with urgency to make GE simpler and stronger to drive growth and create more value for our shareowners.”
General Electric Company shares rose $0.45 (+2.20%) in premarket trading Monday following the announcement. Year-to-date, GE has declined -33.43%, versus a 17.11% rise in the benchmark S&P 500 index during the same period.