Intel Corporation (INTC), International Business Machines Corp. (IBM), Cisco Systems, Inc. (CSCO): Three Dividend Payers with Good Payout Ratios

Positive Operating Cashflow

Every business needs to manage cash so that enough money is available to finance operations and handle any emergencies. In the preceding quarter, Intel generated an operating cash flow of $4.3 billion and net cash outflow of $-2.78 billion, compared to $-636 million in the first quarter of 2012. On the other hand International Business Machines Corp. (NYSE:IBM) and Cisco Systems, Inc. (NASDAQ:CSCO) reported net cash flow of $173 million and $-1725 million, respectively. Intel repurchased its shares at a cost of $625 million and achieved the best net cash flow growth in the entire semiconductors industry. Intel’s balance sheet represents cash in hand of $8.5 billion as compared to IBM and Cisco cash in hand of $10.4 billion and $9.8 billion, respectively, but Intel has a lower long term debt as compared to International Business Machines Corp. (NYSE:IBM) and Cisco Systems, Inc. (NASDAQ:CSCO), which increases its ability to sustain its dividend.

Final Words

These three companies have the ability to maintain their yields and increase their payout ratios. Intel has a history of dividend growth, but investors should keep a close eye on the success of its Bay Trail and Clover Trail chips. The success of this hardware will decide the future of Intel in the handheld industry.

Red Chip has no position in any stocks mentioned. The Motley Fool recommends Cisco Systems and Intel. The Motley Fool owns shares of Intel and International Business Machines.

The article Three Dividend Payers with Good Payout Ratios originally appeared on Fool.com and is written by Red Chip.

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