As investors, we are always on the prowl for great companies we can buy at discounted prices. Lucky for us, the sell off over the past few days has placed some great businesses on sale. These companies are not only cheap, but have great dividend yields, strong prospects, and a ton of cash on their balance sheets.
It’s what’s inside
Intel Corporation (NASDAQ:INTC) has proven to be very successful at generating cash as it has been able to convert close to 12% of its revenue into free cash flow. This massive amount of cash flow has helped to build up its balance sheet. Intel Corporation (NASDAQ:INTC) currently has $17.6 billion or $3.45 a share in cash and cash equivalents.
Intel Corporation (NASDAQ:INTC) also uses very minimal amounts of debt. It currently has a debt-to-equity ratio of just 0.26. Its dividend yield of 3.60% is solid and safe considering its payout ratio is only 44%. Intel Corporation (NASDAQ:INTC) has a history of providing value to shareholders through dividends and buybacks.
The future of Intel Corporation (NASDAQ:INTC) lies in its ability to adapt its products to a the mobile market. Intel had its first breakthrough into the tablet market with Microsoft’s Surface Pro. It continues to gain ground with Samsung recently announcing its next generation Galaxy Tablets will be powered by Intel’s Haswell chips.
The Samsung win is especially important, as the Galaxy tabs are Android-powered devices. Intel, who has traditionally been associated with Windows products, will need to break into Apple and Android devices to stay relevant.
The jack of all trades
Cisco Systems, Inc. (NASDAQ:CSCO) trades at 11.82 times forward earnings with a dividend yield of 2.80% and a payout ratio of 29%. The company appears dedicated to shareholders after increasing its dividend by 183% since the second quarter of 2011. Cisco Systems, Inc. (NASDAQ:CSCO) also has a very attractive balance sheet with $47.39 billion or $8.87 in cash per share. It has also been able to effectively manage debt as the company currently operates a debt-to-equity ratio of just 0.28.