Better Buy: General Electric vs. Verizon
The efforts to combat COVID-19 appear to be pushing the world toward a global recession. Some market watchers are even suggesting that the United States could see a worse economic downturn than the one it lived through between 2007 and 2009. That's a terrible backdrop for any company, including icons like General Electric (NYSE: GE) and Verizon (NYSE: VZ). But if you are looking at perhaps investing in these big-name companies, one is in a better position to weather a recession than the other. Here's a quick primer on what you need to know as part of your decision-making process.
General Electric provides industrial products and services to other companies. It is an inherently cyclical business, with demand ebbing and flowing along with activity in the broader economy. A general economic downturn will likely lead to weak performance across key parts of its portfolio. The problem is that, of the company's four main business segments, two -- renewable energy and power -- were already struggling despite the upbeat economy the U.S. was experiencing up until February. The pair posted low-single-digit or negative operating margins in 2019, and burned cash instead of generating it. GE isn't expecting much improvement on either front in 2020.
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Source Fool.com
