Mad Money

GE Stock to Outperform Dow: Cramer

Cramer's Dow 'Diamond' Stock: GE

Cramer on Thursday detailed several reasons why he thinks shares of General Electric are set to outperform the Dow Jones industrial average in 2012.

To start, many of General Electric’s businesses seem likely to do well in the year ahead. The Fairfield, Conn.-based company is engaged in  energy infrastructure, integrated electrical equipment, aerospace and much more.

Meanwhile, the company recently raised its dividend by 13.3 percent. The stock currently sports a 3.7 percent dividend yield.

Finally, Cramer thinks the stock is “dirt cheap.” It’s selling for 11.7 times forward earnings, which is cheap compared to its 13.4 percent long-term growth rate. Plus, it’s trading at a 20 percent discount to its historical multiple.

Cramer thinks investors should consider buying shares at current levels because this stock could prove to be yet another “diamond of the Dow.” He also includes Kraft and AT&T in that group.

General Electric owns 49% of NBCUniversal, which operates CNBC.

Call Cramer: 1-800-743-CNBC

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