General Electric Company (GE) & More: Dividends from Industrial Giants

The technology industry has for years profited from helping companies operate more efficiently. IT isn’t the only place where efficiencies can be found, however, and industrial giants ABB Ltd (ADR) (NYSE:ABB), Emerson Electric Co. (NYSE:EMR), and General Electric Company (NYSE:GE) all stand to benefit from helping customers do more with less.

Machines for the Future

The computer has allowed companies the world over to dump paper and replace it with computer files. Along with this has come powerful tools to manage the data that has been created. Taken together, IT has been a source of massive savings and process improvement.

However, getting paper out of the work flow isn’t the only place where a company can improve performance. Often, streamlining operations means changing manufacturing processes or other physical operations. While computers play a role in that, a different type of company is takes the lead here.

General Electric Company (NYSE:GE)’s lighting unit, for example, helps customers save money by switching to LED lighting. That may sound kind of simple, but it can be every bit as important to the bottom line as installing a new database system to streamline ordering processes. And that’s just a small example.

Three dividend paying industrial giants that income investors should look at are:

ABB Ltd (ADR) (NYSE:ABB)

ABB Ltd (ADR) (NYSE:ABB) is based in Switzerland, but operates in more than 100 countries around the world. It breaks its operations into five segments: Power Products, Power Systems, Discrete Automation and Motion, Low Voltage Products, and Process Automation. All represented around 20% or so of the top line in 2012 except Low Voltage Products, which was just 16%.

Taken as a whole, ABB makes everything from circuit breakers to robots, but has a specialty in dealing with energy. Management has done an excellent job of expanding its presence around the world, and now generates almost half of revenues from emerging markets. That should be a strategic strength going forward as these nations industrialize. However, it is still a fierce competitor with a notable position in mature markets.

ABB’s dividend is less than 10 years old, but management has shown a commitment to annual increases. With a strong balance sheet, notable emerging market exposure, and a 3% dividend yield, the company is worth consideration by conservative income investors.

Emerson Electric Co. (NYSE:EMR)

Emerson Electric Co. (NYSE:EMR) breaks its business down into five units: Process Management, Industrial Automation, Network Power, Climate Technologies, and Commercial and Residential Solutions. The first three segments make up about 75% of sales. Emerging markets were about 36% of the top in 2012, with a near-term goal of increasing that to 40% by 2015.