U.S. manufacturer GE Vernova has significantly boosted shareholder returns, signaling strong market demand for new natural gas power equipment in the coming years.
The power equipment maker announced during its Investor Day event in New York on Tuesday that it would double its dividend, expand its share repurchase program, and raise its profit outlook.
GE Vernova, which spun off from General Electric in early 2024, has benefited from surging U.S. electricity demand driven by data centers, AI technology, and broader electrification trends. Its shares have risen approximately 86% year-to-date, climbing another 5.7% in late trading on Tuesday.
CEO Scott Strazik stated in an interview, "AI is a tangible growth driver for us today, but not the only one. We’re generating substantial cash flow, which creates opportunities for proactive moves."
The Cambridge, Massachusetts-based company raised its long-term profit forecast beyond 2028 from $45 billion to $52 billion and lifted its adjusted EBITDA margin target from 14% to 20% for the same period.
As one of the top performers in the S&P 500 this year, GE Vernova also increased its quarterly dividend to $0.50 per share and expanded its share buyback authorization from $6 billion to $10 billion. The company expects its total order backlog to grow from $135 billion to around $200 billion by 2028, with electrification orders doubling from $30 billion to $60 billion.
While margins for its power and electrification businesses are projected to exceed prior expectations, its wind energy segment is expected to underperform. By 2028, adjusted EBITDA margins for power and electrification are forecast at 22%, compared to just 6% for wind.
Recent concerns about an AI bubble and its potential impact on the energy sector have caused volatility in tech and utility stocks. Strazik dismissed such worries, citing the company’s robust outlook.
He asserted there is no bubble in either tech or utilities, noting that Q4 2024 will mark peak equipment deliveries to hyperscale cloud providers—with confidence in further expansion next year. "The momentum of growth is undeniably accelerating," he added.
