General Electric said today it will slash its stock dividend from 24 cents per outstanding share to 12 cents, with the change expected to occur next month. The move represents a 50% reduction of the quarterly payout. The industrial conglomerate–one of the most widely own stocks in the country–has been seeking to turn around its dwindling share price.
Per CNBC, GE has been paying dividends since 1899 and has only cut them two other times in history: once in 1939 at the tail end of the Great Depression, and again in 2009 after the Great Recession.
Dividends are paid out to shareholders quarterly—typically by more established companies–although they are not guaranteed. But dividend cuts are rare when the economy is strong, as it is right now. As Reuters reported yesterday, GE could actually lose its place on the veritable Dow Jones Industrial Average, which would be almost unheard of–it’s currently the only company still listed there that was part of the original index when it debuted in 1896.
In a statement, GE’s chairman and CEO, John Flannery, said the company didn’t make the decision to cut its dividend lightly. “We are focused on driving total shareholder return and believe this is the right decision to align our dividend payout to cash flow generation,” he said.
He added that the dividend remains an “important component of GE’s capital allocation framework.”
Read the full announcement here.