Here’s Why Jim Cramer Sees GE Going Higher

Jim Cramer is down on tech at the moment, but he sees big things in the cards for industrial heavyweights like General Electric (NYSE:GE) and Honeywell (NYSE:HON). In fact, the opinionated CNBC host told "Squawk Box" Friday he sees GE joining the slate of companies with growth on the way.

Cramer backed his boisterous take on GE's earnings report with references to growing profit margins in several GE divisions.

"One of the reasons why I like what I see from General Electric is that, in almost every business, the margins were improving," he said on Friday. "Their power, their water infrastructure, that had been…the really big disappointment. The margins were up there, too."

Cramer was also enthusiastic about Jeff Immelt's earlier comments. Immelt, the chief executive of GE, had projected a positive viewpoint following GE's earnings report. Cramer noted the contrast to what was happening among technology companies.

"It's almost as if these companies are doing everything right and tech seems to be doing everything wrong."

But Cramer mainly wanted to state his case why he saw GE stock headed for gains. Citing the aerospace sector, Cramer saw a major bull market, which would help Boeing (NYSE:BA) along with GE and Honeywell, all of whom are benefiting from an improved U.S. industrial business.

"You get the margins up, GE joins the crowd of companies that go higher here," he said on "Squawk Box." Cramer also believes GE shareholders will see better dividend payments in the coming quarters. "I think this company is going to be returning more capital, increasingly."

Cramer made it clear he didn't support those who say stagnant revenues are a warning sign for big industrial companies. "Those people have been so wrong, it's frightening." He said it all comes down to the margins, which are improving for GE and the other industry powerhouses.

GE's Friday earnings report was enough to boost the stock some 5 percent in afternoon trading, with analysts predicting good things ahead for the manufacturing sector across the world, which is usually boosted by the strength of companies like GE.

"It is encouraging to see customers willing to sign agreements for a new piece of capital equipment. That indicates a level of certainty in the economic situation," one Morningstar analyst told Reuters.

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