GE Aerospace shares closed at $321 on Friday, marking a significant gain of 4.78% for the session. The rally followed the company's decision to raise its quarterly dividend by 31% to $0.47 per share, up from $0.36 previously. This adjustment brings the annual dividend to $1.88, yielding approximately 0.61% based on Thursday's closing price.
Aviation Sector Dynamics
The dividend hike comes amid ongoing supply chain challenges in the aviation industry, which continue to pressure airlines with higher maintenance costs. Industry leaders have described these persistent disruptions as a "new norm," highlighting their impact on operational expenses. Meanwhile, demand for aircraft engines remains robust, with GE Aerospace's joint venture, CFM International, reporting a 25% production increase planned for 2025 and targeting annual output growth of at least 10%.
Friday's advance halted a two-day decline for GE stock, leaving it just 3.54% below its 52-week peak. Trading volume reached 5.7 million shares, surpassing the 50-day average of 5.4 million. The broader market also saw gains, with the S&P 500 rising 1.97% and the Dow Jones Industrial Average climbing 2.47%. Peers like Honeywell and RTX posted increases of 1.94% and 1.37%, respectively.
Market Outlook and Risks
Investors will watch whether Friday's momentum persists into the coming week or if profit-taking emerges. GE Aerospace must balance rewarding shareholders with maintaining production momentum to meet strong aftermarket demand for parts and services. However, prolonged supply bottlenecks could quickly reverse gains, especially if broader industrial stocks face headwinds.
The new dividend will be distributed on April 27 to shareholders of record as of March 9. Those purchasing shares after March 9, the ex-dividend date, will not be eligible for this payment.
