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Goldman Sachs recommends GE suspend dividend

General Electric ended a bad week on an ugly note when Goldman Sachs recommended Friday that the Thomas Edison-founded company suspend its dividend for the first time in 119 years.

The bank’s gloomy report came days after the Dow Jones announced it would boot GE from its iconic blue-chip index, where it was the last original member of the 30-company stock gauge.

“GE is in a challenging situation,” Goldman analyst Joe Ritchie wrote. Among the bleak prospects for the company are a credit ratings downgrade and struggles to raise capital.

The situation at the 126-year-old company is so bad that Ritchie likened it to BP following the 2010 Deepwater Horizon explosion, which killed 11 oil rig workers and led to the largest oil spill in American waters.

Management at the oil company had suspended its dividend in order to pay for expected fines and penalties — a decision that cratered the share price, but ultimately led to a recovery.

“While we acknowledge that this is a vastly different case from GE’s current situation, we highlight BP’s decision as an example where management was able to remove near-term noise while focusing on long-term solutions.”

Earlier this year, GE cut its dividend from to 12 cents from 24 cents.

The company’s stock has fallen more than 60 percent from a post-financial crisis high of $32.88 on July 15, 2016. GE shares rose 2.3 percent on Friday, to $13.05.

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