General Electric (GE) was the quintessential dividend growth stock in the 1990s. It likely made many millionaires through price appreciation and a rising payout. Eventually, the company ran into problems during the subprime mortgage crisis and the Great Recession. depositphotos Today, GE is an aerospace company focusing on commercial and defensive markets. It divested the healthcare and power businesses. However, those companies still retain “GE” in their name. The firm produces solid results with higher revenue, profit, and free cash flow. Debt and leverage are down, too, and the company has a BBB+/Baa1 lower-medium investment-grade credit rating.Notably, GE has changed its capital allocation strategy to invest organically in growth, return cash to shareholders via buybacks and dividends, and perform M&A. As a result, we view General Electric as a dividend growth stock again. The Jack Welch EraGeneral Electric was a conglomerate run by Jack Welch for two decades. He initially reduced the headcount by 80,000 in a few years, earning the name “Neutron Jack.” Welch also reduced inefficiencies and acquired many companies, expanding the corporation’s footprint. Although known as an industrial conglomerate, GE had significant financial operations in GE Capital. It also owned NBC, Kidder Peabody, and many other companies. Revenue and profits soared, thus the share price. The Market Capitalization SoaredBy the mid-1990s, General Electric became the largest company by market capitalization. It held the position until the dot-com boom when Microsoft (MSFT) surpassed it. After the dot-com crash, GE retook the number one spot. GE was number one and occasionally number two in the ranking until rising oil prices caused Exxon Mobil (XOM) to surpass it in 2005.General Electric never regained its former glory. Exxon Mobil held the top sport until 2011 when it was surpassed by Apple (AAPL). Since then, the two companies with the largest market capitalization have been Apple and Microsoft. The Subprime Mortgage Crisis and Dividend CutJack Welch retired in 2001. His successor at GE, Jeff Immelt, could only partially replicate his success. Despite Welch’s achievement in increasing share price, GE was different when he took it over than when Immelt became the CEO.Because of its financial operations, the company’s fortunes turned during the subprime mortgage crisis and the Great Recession. Additionally, demand for many of its industrial and consumer products plunged. Warren Buffett even invested $3 billion, granting the company a lifeline in 2008 when the credit markets froze and GE Capital struggled. He received perpetual preferred stock with a 10% dividend callable in three years with a 10% premium. Buffett also received warrants to purchase $3 billion of common stock exercisable at any time over five years. It was a better deal than most people get.Still, the share price plunged approximately 42% in 2008. The company’s market capitalization fell, and the dividend was cut in 2009. GE was a Dividend Aristocrat but lost its status.  Was GE Too Big to Manage?The reasons for the failure were numerous. However, many people point to the focus on short-term quarterly results and financial engineering as key culprits. GE had boosted leverage and cut its contributions to its vast pension plan. In some years it reportedly had negative pension contributions.The firm also reduced investment in its R&D division, making it difficult to keep up with competitors’ technological advances. The firm was no longer an industrial and engineering business focused on electricity. Instead, it was a financial company.Moreover, General Electric had become too large and complex to manage. Ultimately, GE had lost its strategic focus. GE’s Dividend Was Cut Nearly to ZeroThe end of the Great Recession did not stop the firm’s travails. GE faced years of sub-par performance because of complexity, overpaying for acquisitions, and lack of strategic focus. General Electric’s management spent years divesting its financial operations and underperforming divisions. However, the share price did not regain its peak, and the company struggled. The stock price eventually recovered but failed to regain its previous highs before falling. The dividends were cut again in 2017 and 2018, reaching a quarterly rate of $0.01 per share.Ultimately, in 2018, after many years of underperformance, GE was dropped from the Dow Jones Industrial Averages (DJIA). It was one of the twelve original companies in the index. Because the Dow 30 is price-weighted and contains large-cap stocks, GE was no longer a good fit since the share price had plummeted. The Split and Dividend IncreaseWe discuss GE because the company has returned from its travails. It recently split into three corporations: GE Aerospace, GE HealthCare Technologies (GEHC), and GE Vernova (GEV). The legacy firm is GE Aerospace, which became the General Electric Company. The stock price has been the highest since 2016, with good results and optimism about the aviation business. However, it is still short of its all-time high share price and market capitalization. GE HealthCare is a medical device firm, while GE Vernova holds most of the old electrical and power businesses.Two of the three companies pay dividends, while GE Vernova does not yet. General Electric’s dividend was notably boosted 250% to $0.26 per quarter from $0.08.  The Bottom LineIt will be many years before GE returns to its former dividend growth glory and Dividend Aristocrat status, but it has a path to get there now.More By This Author:The Stock Market This Week – Sunday, May 12Union Pacific – Margins Improved Despite Sluggish VolumesCostco Dividend Stock Analysis