There's a reason General Electric shares are among the most popular in the stock market today. This multinational has what many industrialists dream of with an extremely varied activity and an international clientele. But before buying this security or trading online, check out some information about it as well as a historical analysis of its price over the past 10 years.
Demand from the airline industry is also expected to grow in the coming years with orders for new aircrafts. The aeronautical industry is currently experiencing a significant growth phase which should benefit the subsidiary specializing in this area of General Electric.
The group will no doubt also benefit from the world's growing interest in renewable energies. The General Electric group is one of the first to position itself in this sector of the future and therefore has every chance of benefiting from the enthusiasm in the years to come.
Government and environmental regulations result in higher compliance costs and slower growth.
Competition in all areas of General Electric's activity is also a major obstacle to its growth with certain very aggressive companies.
Finally, General Electric's strong international presence also makes it more sensitive to the effects of exchange rates. The evolution of the price of the various currencies should therefore be monitored and compared to the rate of the US dollar in order to determine the profitability and competitiveness of the company.
The General Electric group presents a diversified activity to say the least. Its overall turnover is achieved through various fields, mainly manufacturing equipment and infrastructure, but also providing financial services to businesses and individuals, manufacturing medical imaging systems, technology infrastructure services and manufacturing domestic and industrial capital goods.
Although most of its profits are made in the United States, it also reaches the American, European, Asian and African market.
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Now that you are more familiar with General Electric, let's learn more about its main competitors in the market and in its sector with an introduction to its biggest rivals.
In the medical equipment sector, the American pharmaceutical company Johnson & Johnson is of course a serious competitor of General Electric. It produces pharmaceutical and medical equipment, hygiene products, cosmetics and also provides related services to consumers and healthcare professionals. The group is headquartered in New Brunswick, New Jersey in the United States and has more than 250 subsidiaries that enable it to operate in some 60 countries and market its products in 175 countries. Johnson & Johnson is also a constituent of the Dow Jones Industrial Average and the Fortune 500.
Another major competitor of General Electric in the field of medical technology is of course Medtronic. This internationally active company is based in Dublin, Ireland, and also has a headquarters for the Europe, Middle East and Africa markets in Tolochenaz, Switzerland. For the Asia/Pacific region, another headquarters is based in Singapore.
Philips is also a competitor of General Electric, based in Amsterdam. It is one of the world's leading manufacturers of household appliances, medical equipment and lighting. The group currently employs 114,000 people in around 100 countries and has three distinct business divisions, each corresponding to a strategic area
The French multinational company Alstom, which specialises in rail transport with trains, trams and metros, should also be followed closely. This group was part of the Alcatel-Alsthom group, which is the new name of the Compagnie Générale d'Electricité or CGE, before its activities were pooled with part of the GEC group. It then regained its autonomy with its listing on the stock exchange.
Finally, the last competitor of General Electric that we will introduce here is the Siemens group which is an international group originating from Germany and which specialises in the field of energy, health, industry and construction. The group was founded in 1847 and has become the largest private employer in Germany and the largest engineering company in Europe in terms of employees.
To conclude, here are details of the recent partnerships that the General Electric group has set up and which have impacted its share price on the stock market.
In 2011, the EDF group and General Electric announced a partnership aimed at creating a high-power combined cycle power plant on the EDF site in Bouchain, in the Northern region of France.
In 2016, General Electric and Engie signed a partnership with the aim of improving the performance of electricity production activities and better manage energy assets.
Also in 2016, General Electric became partners with the Apple group to integrate its Align LED bulbs into the HomeKit platform allowing Apple users to control their household accessories remotely.
It is very interesting to carry out a complete swot analysis to determine a company's strengths and weaknesses before starting to trade its share on the stock market. This will enable you to determine more precisely the growth potential of the company and thus the direction that the trend in the price of its assets is most likely to follow in the more or less long term. Let's start here by detailing together the strengths of this value with the strengths of the General Electric group.
One of the greatest strengths of the General Electric group is, of course, the diversification of its product portfolio. In fact, the group designs and manufactures products in a total of eight different business sectors. These include General Electric Capital, Aviation, Power and Water, Oil and Gas, Health Care, Appliances and Lighting, Energy Management and Transportation. General Electric's business diversification also extends to the markets in which it sells its products across all lines of business.
We also appreciate the good visibility of the Group's order book, which ensures its profitability over several months and even several years. General Electric often enters into long-term contracts with its main customers.
Another strong point of General Electric's business is the group's revenue stream. Indeed, in addition to an excellent diversification of its product range, General Electric benefits from an excellent balance of revenues from its various activities. As a result, it is less exposed to commercial risk since it is not dependent on just one or a few activities and can offset possible losses in any of its subsidiaries. However, the General Electric Capital subsidiary remains the one that generates the largest share of profits with no less than 25% of total revenues, as do the water, aviation and oil and gas subsidiaries, which each generate between 10 and 20% of the Group's revenues.
Finally, we can also highlight the importance of the General Electric group's investments in research and development. The group has in fact created a real R&D pole called GE Global Research which benefits from numerous technologies enabling it to innovate in all the sectors in which it operates and in cutting-edge fields such as electronics, metallurgy, fluid mechanics and many others. The group is thus able to create increasingly innovative products and thus meet the new needs of its customers while maintaining its leadership in its preferred fields.
Firstly, we know that the General Electric group is facing, and has been facing for some years, various legal proceedings that make it difficult to bring its products into legal compliance and that increase the cost of its products. Several of these proceedings are still pending in various countries. This could therefore have a direct impact on the company's positioning and financial conditions in the countries concerned and could therefore have a more or less significant impact on its share price on the stock market.
Another major weakness of the General Electric Group is its rather unfavourable debt level. Indeed, the group has borrowed large amounts in recent years, which increases the overall level of debt and hinders the possibilities of new projects and the company's operations. In total, General Electric's long-term borrowings represent more than $200 billion. To this must of course be added the sometimes very high interest payments on these loans, which also increase the group's overall debt.
We also regret the level of income from the industrial segment, which has been showing signs of weakness for several years now compared to what is being achieved in the other segments.
Compared to the competition and despite numerous efforts to deploy its activities internationally, General Electric is still struggling to position itself on the Asian market, which remains very closed for the moment and yet represents a major challenge for the future of this business sector.
Finally, another weak point is General Electric's very high dependence on its supply of raw materials. In fact, the Group's entire business depends to a very large extent on several other companies, be they subcontractors or the raw materials markets for its supplies. Simple delivery delays or the halting of such deliveries therefore immediately have disastrous consequences on the group's revenues, as do possible financial disputes and disagreements that can sometimes even lead to the halting of operations.
It is clearer from these few negative factors that the risks are still very present for General Electric. Your long-term strategies must therefore take this risk into account.
It is interesting to compare the financial results of the General Electric Group from one year to the next in order to assess its growth potential. 78,123,152,000 in 2019 compared to 101,390,344,000 in 2018. The group's net income thus fell from -20,040,898 euros to -4,386,262 euros in 2019.
As we have seen in our article, the General Electric Group has different types of activities. Indeed, these activities were divided into 5 different branches in 2008 following a restructuring of the company. Today, these 5 divisions still group the different activities of the group with the GE Energu Infrastructure division, the GE Tchnology division, the GE Capital division, the GE Consumer & Industrial division and NBCUniversal.
The evolution of the General Electric share price actually depends on various factors. The most important are of course fundamental factors such as the Group's financial results and its growth plans or major news. But investors can also speculate based on technical signals, so chart analysis should not be neglected if you want optimal signals.
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