General Electric Company (GE), Siemens AG (ADR) (SI): The Future of Coal Today

General Electric Company (NYSE:GE) is probably the better option for investors. Since taking a government bailout and cutting its dividend during the 2007 to 2009 recession, it has refocused around its industrial core. That’s been a slow process, but earnings and dividends have headed higher over the last three years. GE shares recently yielded around 3.2% and remain well off their pre-recession highs. There’s plenty of upside potential.

Siemens AG (ADR) (NYSE:SI), meanwhile, is a roughly similar industrial giant based out of Europe. While the company didn’t face the same financial difficulties as General Electric Company (NYSE:GE) during the recession, its exposure to economically troubled Europe remains a drag. Additionally, the company’s profit margins aren’t as robust as GE’s.

Siemens AG (ADR) (NYSE:SI) is restructuring to bring costs down. Over the next few years that should help improve margins and support earnings growth. The shares yield around 2.8%, but don’t have as much long-term appeal as GE.

Fixing Coal

The technology to clean coal is here today. It isn’t cheap, but keeping coal as a fuel option is vital to keeping electric costs contained. The Southern Company (NYSE:SO) and Duke Energy Corp (NYSE:DUK) are ahead of the curve on building the coal plants of the future and should ultimately benefit from their willingness to take risks. General Electric Company (NYSE:GE) and Siemens AG (ADR) (NYSE:SI), meanwhile, will benefit as new coal plants are built using this technology both domestically and abroad, where the use of coal isn’t frowned upon.

The article The Future of Coal Today originally appeared on Fool.com and is written by Reuben Brewer.

Reuben Brewer has no position in any stocks mentioned. The Motley Fool recommends Southern Company. The Motley Fool owns shares of General Electric Company. Reuben is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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