General Electric (GE) will report financial results for the third quarter this Friday and speculation is rampant that the industrial company will guide for lower profits and potentially even slash its dividend. Whether or not General Electric will cut its dividend on Friday, I expect investor sentiment to remain bearish over the short haul. In my view, a dividend cut would be the perfect time to buy into General Electric.
Dividend cuts are never a good thing, at least not for shareholders that have bought into the whole dividend growth story. As income investors we want our income vehicles to produce reliable, preferably growing dividend income over time, and - in this respect - General Electric is one of the best dividend stocks around. General Electric's dividend history spans more than a century since the industrial company has paid a dividend every quarter since 1899. Though GE slashed its dividend payout during the last recession in 2009, dividend growth quickly resumed (it is worth keeping this in mind as investors are increasingly fearful of a dividend cut now).
