General Electric (NYSE: GE) reported its first quarter 2021 results on April 27th. Adjusted earnings were two cents above analyst estimates, but fell short of consensus by $ 420 million. That news dragged GE stock down. Source: testing / Shutterstock.com Despite a mixed quarter, I see a company that seems poised to become the dividend producer it was so many years ago – General Electric was until it got its dividend down to just one Cent lowered in December 2018. That’s why I see GE stock that way. InvestorPlace – Stock News, Stock Advice, and Trading Tips GE Stock: Free Cash Flow Gets Stronger As any well-worth investor knows, a company pays dividends out of excess cash. Hence, those names that generate healthy cash flow have no problem increasing their dividends year on year. At the height of its dividend payout in 2008, GE stock paid out annual dividends of $ 1.24 (adjusted for split). It has never been this high since then. For the fiscal year, the industrial business generated cash flow from operating activities of $ 19.1 billion (page 75). After deducting $ 3 billion in investments, the industrial business had free cash flow (FCF) of $ 16.1 billion. In 2020, GE’s four industrial companies generated an FCF of $ 606 million, down from $ 2.3 billion in 2019 and $ 4.8 billion in 2018. 10 of the best Nasdaq blue-chip to buy Equities In 2008, industrial companies generated almost 27 times as much FCF as they did in the first quarter of 2021, industrial companies had FCF of $ 845 million, 62% more than a year earlier. That is still not positive, but it is considerably better than at this point last year. Commenting on the results, CEO Larry Culp said, “I am proud of the solid first quarter results for the GE team, despite the difficult environment for Aviation. We’re improving our cash performance and profitability with industrial free cash flow growth of $ 1.7 billion year over year. “In the results, the company also reiterated its full-year 2021 outlook, stating that GE Industrial’s FCF will be between $ 2.5 billion and $ 4.5 billion. This equates to a 313% increase over 2020 at the lower end of the FCF estimate and an increase of 643% at the high end. To arrive at an annual dividend payout of $ 1.24 in dividends, GE would need to generate approximately $ 10.9 billion (8.8 billion shares outstanding multiplied by $ 1.24) in FCF to enable such a payment. So it is clear that this will not happen in either 2021 or 2022. However, it could happen in 2023 if Culp’s plans continue to grow in importance and the company’s FCF continues to grow. GE and Its Current Dividends Anyone who is a long-term stockholder of GE must have trouble seeing the current dividend yield at a meager 0.3%. That low rate of return is part of the price that Culp had to pay to expedite debt repayment. Since late 2018, GE has reduced its debt by more than $ 70 billion. That alone makes Culp’s tenure a success. However, it is the CEO’s decentralization efforts that determine the future of the company. A lean organization that is closer to customers should help restart GE’s growth engine. When you consider that this company’s power and renewables segments accounted for around 43% of its industrial sales of more than $ 16 billion in the first quarter, but didn’t generate a profit, the upward trend is actually quite promising from an overall bottom line. If both segments had a profit margin of 5% in the first quarter of 2021, speak of a profit of $ 358 million on revenue of $ 7.1 billion, rather than a loss of $ 321 million. That’s a turnaround of nearly $ 700 million. Based on 8.8 billion shares outstanding, that $ 700 million equates to about eight cents per share of potential dividends that GE could have paid. I realize this is only theoretical, but just imagine how much GE stock would jump on the news for it to increase its quarterly dividend by 700% – from just one cent to eight cents per share. I just know that this would matter. GE Stock Conclusion I recently recommended GE stock as one of 10 dividend stocks to buy for under $ 25. One reason was the sale of GE Capital Aviation Services (GECAS), the company’s aircraft leasing business, to Aercap (NYSE: VRE) for $ 24 billion in cash and 46% of the combined company. I wrote on March 31, “Culp believes that deleveraging and risk reduction on its balance sheet will put the company in a better position to focus on its other operating segments. As stated in the AerCap sale press release, the deal marks GE’s transformation into a more focused, simpler and stronger industrial company. I still agree with that feeling. The return to its roots should, in due course, bring GE back into favor with dividend investors everywhere. In the meantime, take advantage of the downward volatility and buy GE stock in the $ 12 range or even below. This time next year we may not be able to include General Electric in a discussion of dividend stocks to buy below $ 25. At the time of this writing, Will Ashworth held positions (either directly or indirectly) in any of the securities identified in this article. Will Ashworth has been a full-time investing writer since 2008. His publications include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger and several others in the US and Canada. He is particularly fond of creating model portfolios that will stand the test of time. He lives in Halifax, Nova Scotia. More from InvestorPlace Why Everyone Is Investing In 5G WRONG It doesn’t matter whether you get $ 500 million or $ 5 million in savings. Do this now. 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