MENLO PARK, Calif. (CNN/Money) -
If only General Electric didn't have so much invested in its wonderfully understated name, it could choose a new one: General Finance.
In case you missed it, GE essentially is a finance company now. The company has said that financial services will make up a little more than 40 percent of 2003 profits. And that was before word came Tuesday of the $5.4-billion acquisition of Transamerica Finance, a unit of Dutch insurer Aegon.
This is only the most recent of the high-profile acquisitions at GE Capital since parent company CEO Jeff Immelt took over in 2001 from the once saintly Jack Welch.
GE Capital today has parts of what once were divisions of Conseco, Abbey National and ABB, to name a few.
If stock price is a function of earnings power and 40 percent of GE's profits come from financial services, then one could argue that GE, worth about $285 billion, is a $100-billion-plus financial services company.
That makes GE's financial businesses alone worth more than Morgan Stanley, American Express, UBS and JPMorgan Chase.
As for the rest of the company, even accounting for its decline in value since its not-warning warning in late June (see my take on that here), GE remains the most valuable company traded in the United States.
What's more valuable?
Of course, GE doesn't want you to think of it as merely a financial services company. Those kinds of companies are great at generating cash but less good at growing. And until now GE has been a growth company.
It's obvious, of course, how GE Capital grows: It shells out billions of dollars to buy more companies. The rest of the conglomerate grows pretty much only when the economy does.
What GE ought to do is embrace its financial self, get in touch with its money side.
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That's basically what it's been doing anyway: The blue-chip credit rating it gets by being a first-rate operator of a television network (NBC) and a maker of jet engines, plastic products and locomotives, to name a few of its products, makes its cost of capital lower than other financial services companies.
That's a strength to be proud of.
It'll never happen, of course, but General Finance really would be a good name for the company that used to "Bring Good Things to Life." (Today's marketing theme is "Imagination at Work." I liked the old one better.)
However, should Immelt take up my suggestion, there'd be one stumbling block: The ticker "GF" is taken by the New Germany Fund, a closed-end mutual fund.
Surely one of the world's biggest financial services company could work something out.
Adam Lashinsky is a senior writer for Fortune magazine. Send e-mail to Adam at lashinskysbottomline@yahoo.com.
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