General Electric Company's (NYSE: GE) Industrial segment is worth between $20.2 billion and $21.7 billion, according to my estimates.

GE Industrial, which constituted 20.5%, 22.1% and 22.9% of GE's revenues in 2006, 2005 and 2004, respectively produces and sells products including consumer appliances, industrial equipment and plastics, and related services. It also provides asset management services for the transportation industry.

GE Industrial strikes me as a hodgepodge of businesses that should either be fixed or sold. In the second quarter, this segment's revenues declined while its profits increased slightly. I was intrigued that Keith Sherin said that its appliances unit generated a return on total capital of 70%. On the other hand I wonder about how many of the other units within this segment earn such high returns.

Assuming that GE Industrial generates net income of $1.3 billion in 2007, here are the range of valuations based on the Price/Earnings ratios of the following peer companies:

• Whirlpool Corp. (NYSE: WHR) P/E: 15.2. $20.2 billion
• Electrolux AB (ADR) (OTC: ELUXY) P/E: 16.3. $21.7 billion

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He owns General Electric shares and has no financial interest in the other securities mentioned in this post.