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The Incredible Dividend Map... Where Stocks Yield 26% a Year! (Ad)pixel
S&P 500   4,297.14
DOW   33,912.44
QQQ   333.06
The Five Hottest Calls From The Q2 Earnings Season 
US Dollar Replaced By "Biden Bucks"? (Ad)
Buffett's firm buys more Apple, Amazon while betting on oil
Norway hits export record amid soaring gas prices
Stocks end higher on Wall Street; economic worries hit oil
US Dollar Replaced By "Biden Bucks"? (Ad)
Myanmar executions revive pressure for more sanctions
Stocks higher on Wall Street; economic worries hit oil price
New climate deal spurs hopes of more carbon storage projects
The Incredible Dividend Map... Where Stocks Yield 26% a Year! (Ad)pixel
S&P 500   4,297.14
DOW   33,912.44
QQQ   333.06
The Five Hottest Calls From The Q2 Earnings Season 
US Dollar Replaced By "Biden Bucks"? (Ad)
Buffett's firm buys more Apple, Amazon while betting on oil
Norway hits export record amid soaring gas prices
Stocks end higher on Wall Street; economic worries hit oil
US Dollar Replaced By "Biden Bucks"? (Ad)
Myanmar executions revive pressure for more sanctions
Stocks higher on Wall Street; economic worries hit oil price
New climate deal spurs hopes of more carbon storage projects
The Incredible Dividend Map... Where Stocks Yield 26% a Year! (Ad)pixel
S&P 500   4,297.14
DOW   33,912.44
QQQ   333.06
The Five Hottest Calls From The Q2 Earnings Season 
US Dollar Replaced By "Biden Bucks"? (Ad)
Buffett's firm buys more Apple, Amazon while betting on oil
Norway hits export record amid soaring gas prices
Stocks end higher on Wall Street; economic worries hit oil
US Dollar Replaced By "Biden Bucks"? (Ad)
Myanmar executions revive pressure for more sanctions
Stocks higher on Wall Street; economic worries hit oil price
New climate deal spurs hopes of more carbon storage projects
The Incredible Dividend Map... Where Stocks Yield 26% a Year! (Ad)pixel

Are General Electric's Downgrades A Warning Sign Or A Buying Opportunity?

Are General Electrics Downgrades A Warning Sign Or A Buying Opportunity?General Electric (NYSE: GE) has been hit by several downgrades recently, leaving some investors wondering if it represents a good time to buy this stock. General Electric is trading at a 58.2% upside to the MarketBeat consensus price target. This upside was reduced recently with a notable downgrade by Morgan Stanley (NYSE: MS), where analysts slashed its price target to $95, down from $100. The reason for the downgrade is that the bank does not expect GE to perform well in the immediate timeframe.

The Bear Case of Investing In GE

Some factors currently go against investing in General Electric. There have been 14 negative EPS revisions in the last 90 days for the company, driven partially by the fact that it missed its GAAP EPS by $0.85 last quarter. When the company announces earnings later this month, it is expected to post a revenue reduction of 2.06%, with total revenue of $17.90B.

When some metrics of GE's stock are compared to the sector median, they do not stack up attractively. The company's YoY revenue growth stands at 1.02%, compared with the sector median of 18.45%, or a -94.47% difference. General Electric's valuation is also expensive when using several ratios. Its FWD P/E GAAP ratio stands at 38.28, while the median is 16.64. However, its forward Price / Sales ratio fares slightly better at 0.97 compared with 1.24, but it's still arguably not compelling enough to consider investing on this basis alone.

The Bull Case of Investing In GE

For GE, In some areas of its business, it does exceedingly well compared to its peers. For one, its cash from operations is exceptional at $4.74B compared to the median's 178.05M. Its levered free cash flow margin is also high at 57.92%, compared with 6.69% for the median. Furthermore, GE shows exceptional internal efficiency with an FWD EBITDA growth of 30.03% compared to the sector median of 12.47%.


GE Vs. Siemens

Siemens (OTCMKTS: SIEGY) is worth comparing to GE as they are both giants in the industrial sector. Furthermore, both companies are evenly matched in terms of market cap. GE has a market cap of 73.46B, while Siemens has a market cap of $85.95B. Although Siemen's stock is slightly higher than GE's, it has a significantly higher number of employees at 303,000 compared with 168,000. Wall Street also has a different opinion on Siemens than it does GE, as it's currently rated a strong buy, while GE only holds the rating of buy.

The returns between the companies over the last ten years could not be more different. Siemen's return stands at 80.13%, while GE's return is a negative -45.19%. The performance YTD of these companies is similar as GE has a -29.21% return and Siemens a -35.89% return.

Siemens is a clear winner when it comes to dividends. The company pays a dividend of $2.27 while GE pays only $0.32. The difference in yield between the companies is 0.48 for GE and 4.21% for Siemens. 

In terms of valuation, the companies are evenly matched on a Price / Sales ratio. GE has a P/S ratio of 0.99 and Siemens 1.17.

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
General Electric (GE)
2.9213 of 5 stars
$79.81-0.2%0.40%-18.82Moderate Buy$100.69
Morgan Stanley (MS)
2.3629 of 5 stars
$92.02+0.4%3.37%12.44Hold$100.75
Siemens Aktiengesellschaft (SIEGY)
2.9664 of 5 stars
$57.05-1.3%2.93%35.44Moderate Buy$156.22
Compare These Stocks  Add These Stocks to My Watchlist 

Should you invest $1,000 in General Electric right now?

Before you consider General Electric, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and General Electric wasn't on the list.

While General Electric currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

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