General Electric (NYSE: GE) investors breathed a sigh of relief when new CEO John Flannery opted not to cut the company's dividend -- at least for now. He did say, however, that the decision might change after a pending insurance review.
Certainly, there are other reasons to like GE besides its current 4.7% dividend yield. But if that yield is what you're after, here are three stocks to consider that are sporting even better yields than General Electric, and that aren't publicly mulling a dividend cut: Royal Dutch Shell (NYSE: RDS-A)(NYSE: RDS-B), Ford (NYSE: F), and Magellan Midstream Partners (NYSE: MMP).
GE's big dividend yield may put a smile on your face, but here are three yields that are even better. Image source: Getty Images.
Royal Dutch Shell (Current Yield: 5.9%)
Not only is the Dutch oil behemoth's yield higher than GE's, but it's also one of the best yields in the entire oil and gas sector. Better yet, Shell has been taking steps to ensure that it's going to be able to continue to offer its dividend for years to come by making changes to its business model.
Shell bought BG Group in 2016 in a $52 billion deal, which gave the company a major offshore footprint in Brazil and also increased its exposure to liquefied natural gas. The company sees LNG as a fast-growing market and jumped at the chance for more exposure. It has also made changes to its operations to focus on generating better returns.
Better yet, the dividend appears to be sustainable. When reporting on the company's Q2 performance, CEO Ben van Beurden announced that Shell had been able to generate $38 billion in cash flow over the prior 12 months, with an average oil price of less than $50 a barrel. That was more than enough cash to cover the company's cash dividends for each quarter during that time. The company was even able to reduce net debt by nearly $9 billion.
That puts Shell's dividend in a much better position than GE's.
Ford (Current Yield: 5%)
Like GE, Ford's stock has been slumping lately, down about 13% over the past three years. This year, though, hasn't been as bad for the company's shares, which are down only about 0.3%, compared with General Electric's 35.6% drop.
Yet the company posted record profit in 2015 on a pre-tax basis. In 2016, profit was nearly as high. So while GE's stock slide seems at least somewhat justified, Ford's seems absolutely mystifying. It's likely that investors are nervous about new disruptive technologies -- think self-driving or all-electric vehicles -- or are concerned that the notoriously cyclical auto market is starting on a downward trend.