Intel Corporation (INTC), Cisco Systems, Inc. (CSCO), General Electric Company (GE): Three Undervalued Dividend Stocks For Safe Income

How are dividends safe?

At present, General Electric Company (NYSE:GE) offers a quarterly dividend of $0.19 per share, a 3.13% yield. Along with the improving economy, this diversified industrial stock is also showing strong improvement in its business. It operates in seven business segments. In Q1, all of its business segments have shown strong growth, except for power and generation. On a consolidated basis, its operating profit stands at $4.1 billion, representing an increase of 14% over the past year’s quarter.

The company is aggressively working on a cost-out plan to enhance its margins. It is looking to reduce $1 billion of operational expenses by the end of 2013. With the cost-out plan, it hopes to generate margin growth of 70 basis points. On the negative side, General Electric Company (NYSE:GE) has a high debt-to-equity ratio of 1.9, compared with the industry average of 1.1.

However, I believe its solid cash position enables it to sustain returns along with debt reduction. The company is projecting a return of $18 billion to investors through a combination of repurchased shares and dividends.

In conclusion

Intel Corporation (NASDAQ:INTC) has a long history of dividends. It looks like a safe dividend stock as it has potential to generate strong cash flows. Cisco Systems, Inc. (NASDAQ:CSCO) is turning out to be an attractive investment for dividend investors. The company has extremely low debt and strong cash flows. Its payout ratio allows it to make hefty increases to its dividends. General Electric Company (NYSE:GE) is aggressively taking measures, such as investment in growth opportunities and cost-cutting measures, to maintain its profitability.

The article 3 Undervalued Dividend Stocks For Safe Income originally appeared on Fool.com and is written by siraj sarwar.

siraj sarwar has no position in any stocks mentioned. The Motley Fool recommends Cisco Systems and Intel. The Motley Fool owns shares of General Electric Company and Intel. siraj is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited

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