General Electric (NYSE:GE) has fallen on very hard times as it works through a massive corporate overhaul. That said, dividend investors might be attracted to its iconic name and generous 3.4% dividend yield. However, there are better options in the industrial space today. Take a look at Eaton (NYSE:ETN) and ABB (NYSE:ABB), because each yields around the same as GE without the same turnaround baggage.

The problem with GE

General Electric's troubles date back to before the 2007 to 2009 financial crisis, when management at the time allowed the company's finance arm to expand. The original goal of the finance division was to support the sale of GE's own products and services, but it strayed far from that niche into areas like home mortgages. When the downturn hit, GE was forced to cut its dividend and take a government handout.

A hand drawing a scale weighing risk and reward

Image source: Getty Images.

It quickly started to refocus its business back to the core industrial space, jettisoning assets like a television network and noncore finance operations. This turnaround effort was going slowly, but the company appeared confident in the direction it was going -- until a new CEO took the helm in 2017 and announced another, even deeper round of restructuring.   

The most recent turnaround effort included a 50% dividend cut. Investors were displeased and pushed the shares sharply lower. That's the backstory behind GE's generous 3.4% yield. If management can gain traction, there's material recovery potential at GE. However, most income investors would be better off avoiding this turnaround story and focusing on industrial giants with generous yields and less baggage.

1. Controlling power

Eaton is a $33 billion market cap industrial company that focuses on helping customers make efficient use of energy. Its business is broken into six divisions: electric products (roughly 33% of revenue), electrical systems and services (26%), vehicle (17%), hydraulics (13%), aerospace (9%), and the newly added e-mobility (the remainder). Eaton's business is also well diversified geographically, with operations that span the globe. The United States accounted for around 55% of sales in 2017, Europe 22%, Asia 12%, Latin America 7%, and Canada the rest.   

GE Chart

GE data by YCharts.

The company experienced something of a turning point last year after entering the year expecting organic growth to be flat. However, as the year progressed, that forecast proved overly negative. Organic sales ended up 3% for the year. As 2018 began, Eaton was projecting organic growth of 4% for the year. But by the end of the first quarter it had already increased that number to 5% on broad-based strength throughout its business.   

Eaton announced a 10% dividend increase in the first quarter and offers investors a generous 3.4% yield. That dividend, meanwhile, is backed by a company that's doing well today, not one that's working on its second turnaround effort since the so-called Great Recession.   

2. A foreign-heavy industrial business

Another strong alternative to General Electric is ABB, which breaks its business down into four divisions: power grids account for around 28% of sales, electrification products 29%, industrial automation 22%, and robotics and motion 25%. ABB's business spans the globe as well, but has significantly more foreign exposure. For example, the largest exposure to the Americas region (which includes North, Central, and South America) is in the company's robotics and motion division, which gets just 31% of revenue from the area -- all of the other businesses generate even less from the Americas.   

A breakdown of ABB's foreign orders and sales, showing that the America's are a relatively small part of its business.

ABB's foreign sales by division. Image source: ABB Ltd. 

Last year wasn't exactly exciting at ABB, with 2017 revenue up 1% and earnings down 1%. However, it completed a corporate restructuring during the year and is looking to 2018 as a critical moment. (Also worth noting, ABB inked a deal to buy a GE division in 2017.) The first quarter didn't disappoint. Although revenue was only up 1% year over year, base orders advanced 5%, with notable strength in the Asia, Middle East, and Africa region, where orders were up 12%. Increasing orders should lead to strong future performance.   

ABB's dividend, which is paid in Swiss francs, was increased for the ninth year in a row in 2017. That said, the hike was modest at around 2.6%. The yield, however, is fairly generous today at roughly 3.4%, though the actual figure will depend partly on exchange rates. Although dividend growth will probably be relatively modest compared to Eaton's, ABB's strong order growth gives it a material edge over GE, which remains mired in a still-undefined turnaround effort.

An iconic turnaround mess

General Electric could be a very interesting investment, but only for those willing to take on the risks of a turnaround -- notably the second turnaround since the end of the last recession. That's why, if you are a dividend investor attracted to GE's historic name brand, you should strongly consider some industrial alternatives. ABB and Eaton are good options, since both are on much sounder footing and offer comparable dividend yields.

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.