These 2 General Electric Spin-offs Had a Banner 2025. Can It Continue?

Are you interested in investing in one of the most storied companies in U.S. history? Well, you now have three choices. I'm talking about General Electric, the legendary company founded in 1892 by Thomas Alva Edison, the genius American innovator who invented the phonograph, electric light bulb, motion picture camera, and countless other devices.

Over its 133-year history, General Electric has been just as innovative. It created advanced technologies in hydroelectric power, aviation, energy grids, wind power, healthcare, materials science, and many other fields.

But the company's descent was just as dramatic. It fell apart like a slow-motion car wreck due to too much diversification, failed business strategies, and a disastrous foray into financial services. Losses at GE's financial unit almost sank the company during the Great Recession. The share price plunged more than 80% between 2007 and 2009.

The original GE split into three separate companies

The original General Electric was then split into three separate publicly traded companies beginning in 2021. One of them, GE HealthCare Technologies, makes equipment like medical imaging devices, X-ray machines, and ultrasound systems. It's been up and down over the past three years but is now up 25% since it was spun off from the original GE in late 2022. For comparison, the S&P 500 index is up about 75% over that time, so it has underperformed the market.

The stocks of the other two spin-offs, however, have fared much better. GE Aerospace (NYSE: GE) makes jet and turboprop engines, among other aircraft components. And GE Vernova (NYSE: GEV) makes power products that generate, transfer, orchestrate, and store electricity. The two split and began trading as separate public companies in April 2024.

Since the split, GE Aerospace is up about 100%, and GE Vernova has climbed 400%. The two stocks had a banner 2025. GE Vernova was up 95% last year, and GE Aerospace rose about 85%. That was in a year when the broader market gained about 17%, as measured by the S&P 500. Can they continue to outperform the market in 2026?

There's more demand than supply for aircraft and parts

GE Aerospace has huge upside due to a supply-demand imbalance in the aircraft industry. Demand for air travel is up, yet the aviation industry is not supplying the aircraft, components, or necessary maintenance to meet it. Commercial air travel grew more than 10% from 2023 to 2024 and is projected to rise by 4.2% annually through 2030.

But there's currently a severe shortage of aircraft and components due to a production halt during the COVID-19 pandemic, a lack of talent, and an aging global fleet of planes in need of repairs or outright retirements and replacements.

Aircraft engine maintenance and repair has become a choke point for commercial aviation, according to consulting firm Bain & Company, with shop turnaround times up 35% for legacy engines and 150% for new engines. Bain says these problems won't even peak until mid-2026 and should last through the end of this decade.

GE Aerospace management forecasts double-digit annual revenue growth from 2025 to 2028 and earnings per share (EPS), rising from $6.10 in 2025 to $8.40 in 2028. That's very good news for shareholders.

GE Vernova is a leader in the power equipment industry

As for GE Vernova, revenue prospects are significant. The company's backlog of grid and electrification equipment rose $6.5 billion to $26 billion. In December, management said it expects to grow its total backlog from $135 billion to $200 billion by 2028. The company is a leader in the industry and is well-positioned to benefit from increasing power needs of artificial intelligence (AI) data centers.

Image Source: Getty Images.

Even better for shareholders, the company doubled its quarterly dividend to 50 cents and raised its stock buyback plan to $10 billion from $6 billion.

Yes, General Electric is back. But it now comes in three flavors. Two of those could be delicious picks for investors in 2026.

Matthew Benjamin has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends GE Aerospace, GE HealthCare Technologies, and Ge Vernova. The Motley Fool has a disclosure policy.