Shares of industrial giant General Electric Company (NYSE:GE) are down around 25% so far in 2017. Meanwhile, peers like Honeywell International Inc. (NASDAQ:HON) and United Technologies Corporation (NYSE:RTX) are up 24% and 8%, respectively. Investors are clearly worried about GE's business today. That concern, however, has pushed the yield up to around 4%, an enticing level for income-oriented investors. Should you buy the dip?

A little history

General Electric has had a tough go of things for a decade or so. To sum it up, GE allowed its finance arm to become too large and, more importantly, move too far away from the industrial company's core business. Indeed, as the financially led recession unfolded, GE was the largest nonbank financial company in the United States.    

Two men looking at a blurprint

Image source: Getty Images.

The recession led to major changes, including a massive dividend cut and dilutive equity sales, but also a shift in the company's business under then CEO Jeffrey Immelt -- who had just taken over the reigns from famed Jack Welch (on whose watch the finance arm was allowed to expand). Immelt pushed a back-to-basics approach, selling non-core assets (like the NBC television station) and materially reducing the size of the finance arm.  

Where we are today

Fast-forwarding a bit, General Electric is nearly done with the transition Immelt started. The finance arm is now basically there to support sales of GE's industrial products. The business is focused around the company's industrial core, including business like power generation, oil and gas drilling, aviation, transportation, and healthcare. And Immelt has just handed off the reigns to a new CEO, longtime GE employee John Flannery.    

The stock is well off its post-recession lows, but it is still lagging behind peers. And notice the dip at the end of the graph below -- GE shares have really underperformed in 2017. With a much cleaner and more focused business, you might expect the stock to be performing better. However, investors tend to look at the short term without thinking enough about the long term.

GE Chart

GE data by YCharts

GE is, without question, in much better shape today than it was a decade ago. But that doesn't mean there aren't any near-term problems. One of the big headlines here is the struggling oil and gas business -- segment profits were down over 50% year over year in the second quarter. Merging that business with Baker Hughes to create Baker Hughes A GE Company (NYSE:BHI) doesn't change that. (As the new name implies, GE is the controlling owner, with an over 60% ownership interest.) That business will remain a notable drag until it fully recovers.  

There have also been issues at the transportation division, where segment profits were down more than 25% year over year in the second quarter, and lighting, which saw a nearly 40% decline in segment profits. Although there were some positive trends, overall, the second quarter was a tough one for GE. Total revenues were down by 12% year over year, and earnings were less than half of what they were in the prior year.    

Compare that to Honeywell, which saw organic sales increase 3% year over year in the second quarter with earnings up 6%. United Technologies' organic revenue, meanwhile, was up 3% in the second quarter with GAAP earnings advancing 5%. You can see where investors might be down on General Electric, here, since competitors are clearly doing much better.    

Moving parts

To be fair, all three of these companies are in the process of adjusting their businesses to better deal with the changing industrial market. So, results are filled with one-time items and are pretty complicated. But, at the end of the day, GE still appears to be working its way out of a much bigger hole because of the troubles with its finance arm.

That said, there's little concern that General Electric will go out of business or that it will never be able to get its industrial assets back on track. And, despite the current headwinds, it remains a dominant, global industrial concern. The issue is more "what have you done for me lately." The answer, of course, is not much, and investors are reacting accordingly.

But investors appear to be overlooking long-term positives like the fact that the oil deal was an opportunistic move during a downturn. It should create material value when that cyclical market eventually recovers. And that new CEO Flannery has taken a proactive approach to cost cutting. For example, he plans to sell the company's fleet of airplanes, suggesting that even top brass will be sharing in the effort. In addition, the company still has options for shifting its portfolio. The best example here is GE's rumored plan to dispose of its lighting business. In other words, there's still good things happening at GE.    

GE Dividend Yield (TTM) Chart

GE Dividend Yield (TTM) data by YCharts

So, if you are a long-term investor, the current issues probably shouldn't matter too much to you. In fact, with an around 4% yield, the current dip could be a great opportunity for patient investors willing to sit through a little adversity. The yield is well above what you'd get from competitors and toward the high-end of GE's own history. Yes, you have to be willing to watch while GE continues to work its businesses back into shape (including the recent overhaul of its upper management), but you'll be paid very well to wait.    

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.