You still have to have them
LAST YEAR I described the US-based industrial conglomerate General Electric (GE) as one of those must-have shares in your portfolio. I genuinely believe that if you are a retail investor and have only been looking at South African shares, then you have two blue chips you should be buying: GE and Google.
These are great businesses and both have managed through challenging times. GE has consistently paid out a quarterly dividend for the last 100 years and in the previous fiscal it paid out $6.45bn in dividends, or $17m per day!
GE is trading on a forward price-to-earnings multiple of just 13 times and while its dividend yield of under 2% looks poor, keep in mind that management has indicated it will return a total of $18bn in the current fiscal through share buybacks and dividends to shareholders.
GE is a great business as it offers exposure to technology, financial services and infrastructure. It is the bluest blue chip out there.