Apple Inc. (AAPL), International Business Machines Corp. (IBM), Cisco Systems, Inc. (CSCO): Three Undervalued Tech Leaders Showing You the Money

Since 2000, IBM has returned over $150 billion to shareholders in the form of dividends and share repurchases. The current dividend yield is 2% and the company has consecutively increased dividend distributions in each of the last 18 years, including a 12% rise for 2013. Slow and steady wins the race, and IBM is not only slow and steady, but also quite cheap.

Cisco

Shares of Cisco Systems, Inc. (NASDAQ:CSCO) plummeted by more than 7% after the company released its last earnings report on August 14. The numbers for the quarter weren’t really that bad, but forward guidance was quite disappointing and the company announced that it will be laying off 4,000 employees.

Weak guidance and a shrinking workforce is not precisely good news, but the market tends to overreact to negative announcements, and this seems to be the case with Cisco Systems, Inc. (NASDAQ:CSCO). The connectivity powerhouse is trading at a P/E ratio below 13 and yielding 2.8% in dividends, which looks quite compelling for a fundamentally strong company.

Cisco Systems, Inc. (NASDAQ:CSCO) is facing increased competition from low cost Asian players like Huawei and ZTE, but the company still holds the quality leader position in networks and connectivity on a global scale. Besides, the company is restructuring its business lines to focus on the more promising areas of the business, segments like Service Provider Video, Wireless and Data Centers are delivering impressive performance and should propel Cisco Systems, Inc. (NASDAQ:CSCO) into its next growth phase as a more focused and profitable corporation.

Bottom line

The market has experienced quite a run over the last years; however, it’s not about the general averages but the individual companies that make those indexes. Digging below the surface can many times lead to compelling investment opportunities, and companies like Apple Inc. (NASDAQ:AAPL), IBM, and Cisco Systems, Inc. (NASDAQ:CSCO) are offering attractive valuation levels, generous capital distributions and considerable upside potential for investors.

The article 3 Undervalued Tech Leaders Showing You the Money originally appeared on Fool.com and is written by Andrés Cardenal.

Andrés Cardenal has no position in any stocks mentioned. The Motley Fool recommends Apple and Cisco Systems (NASDAQ:CSCO). The Motley Fool owns shares of Apple and International Business Machines (NYSE:IBM).

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.