Dr Pepper Snapple Group Inc. (DPS), General Electric Company (GE), Apple Inc. (AAPL): Snag These 3 Stocks for Some Safe Income

Well there is, but like this companies slogan says, you have to “think different.”

By that I mean it’s time for investors to think of a Apple as a value stock with good growth prospects, it’s not the top growth stock in the country anymore. Not being amongst the fastest growers is no sin, and I think Apple Inc. (NASDAQ:AAPL) is well on its way to attracting a value crowd.

For starters

1. Apple Inc. (NASDAQ:AAPL) is now trading at a P/E ratio around 10, essentially the value of a utility company
2. Most of the hedge fund managers and analysts that are going to turn sour on Apple, have done so by now
3. Apple Inc. (NASDAQ:AAPL) now pays a dividend of 2.8%, but only sports a payout ratio of just above 25%

That’s right, the payout ratio is only a hair about a quarter of Apple Inc. (NASDAQ:AAPL)’s earnings. For all the talk about the iPhone maker putting its “cash hoard” to use, it should be noted that while they raised the dividend most of that cash went to stock buy-backs. So while their yield is higher, Apple has less shareholders to pay.

In other words, there’s plenty of room for that dividend to go higher.

With a rising dividend, bearish sentiment, and (hopefully) new products coming soon to spur growth, this one’s just about bottomed. The stock, earnings, and (safe) dividends should grow from here.

Predict tomorrows dividends, today

Yes, a high dividend yield is nice. But dividend stocks, like all stocks, will be valued on what happens tomorrow, not today. The good news, when it comes to dividends, you can predict the future.

As companies increase their dividends, their stock price increases. Management teams of dividend payers will always look to raise their payout, if they can.

The “if,” is the key. A company needs to have a low payout ratio to increase their dividend. All of these stocks have low payout ratios, but the best part is that they should get lower.

General Electric Company (NYSE:GE), Apple Inc. (NASDAQ:AAPL), and Dr Pepper Snapple Group Inc. (NYSE:DPS) have multiple growth catalysts. Their growth potential is trending upward, which means their payout ratios will decrease in the coming quarters.

It’s simple math. These stocks’ dividends are safe, and rising.

The article Snag These 3 Stocks for Some Safe Income originally appeared on Fool.com and is written by Adem Tahiri.

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