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FinanceTerm Sheet

The really, really, really long-term record for GE

By
Carol J. Loomis
Carol J. Loomis
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By
Carol J. Loomis
Carol J. Loomis
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May 13, 2011, 5:26 PM ET
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FORTUNE — This month marks the 115th anniversary of the Dow Jones Industrial Average and a related milestone for General Electric. The media turning up for a DJIA celebratory lunch two days ago learned that GE (GE) is the only company present in the average at its start in 1896 that is also a component today.

Alert! The preceding sentence is carefully couched because there were two brief periods in the very early 1900s when GE dropped out of the DJIA. Why? That’s a mystery, said John Prestbo, editor and executive director of Dow Jones Indexes.

We can, on the other hand, add to the world’s store of knowledge by telling you just how well GE’s stock has performed over those 115 years and a bit more.

To begin with, says Trevor Schauenberg, a GE vice president who spoke at the lunch, the company’s stock was first made available to the public in 1892 (J.P. Morgan and Henry Villard, dumping “Edison” from the company name, engineered the offering) and the price was $108 a share.

Today, taking into account splits that multiplied an investor’s holdings, that same share is worth $92, 206.

Throw those dollar figures into a compound annual growth rate calculation for 119 years, and it turns out that GE’s stock has risen at a rate of 5.8%.

Since the DJIA did not start until 1896, it has no comparable figure. But during the average’s 115 years, it has risen at a lower rate, 5.4%.

The 5.8% rate of gain for GE’s stock does not include dividends nor the reinvestment of dividends that commonly go into total return calculations. So Fortune asked GE’s Schauenberg for a total return figure for the 119 years. And the answer is 9.7%.

The last 10 years, we are sorry to add, did not burnish the company’s record. The Fortune 500 just published (which lists GE as the sixth biggest company — see the snapshot here and full list here) shows that the annual rate for GE’s total return in the 2000-2010 decade was minus 6.3%. [For the 20 worst performing Fortune 500 stocks over that period, check out this gallery.]

Since the end of 2010, though, the company’s price has climbed by 10%. So for now, at least, it’s back on the right track.

And on we go to the next 119 years.

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By Carol J. Loomis
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