Monday, March 7, 2016

Watch List: Cisco Systems

Cisco Systems - the tech company that would love to sell you your next piece of network equipment. If you've ever dealt with the task of obtaining your own router/modem or other tech piece, you've probably heard of their company. They design, manufacture, and of course sell equipment for our networking needs. The company was founded in 84' out of San Jose, California and they operate for in segments for home and business.


Yield: 3.88%
Annual Payout: $1.04 (paid quarterly)
Payout Ratio: 49.3%

With a yield of 3.88%, Cisco definitely brings a nice amount of cash to the table. This means that it can further fuel an already forward rolling portfolio in the right direction. This equates of course to an annual payout of $1.04 and that means good business if you catch my drift. Also, with a payout ratio as small as 49.3%, there is lots of room before the company would have to feel any pressure to slow down their dividend raises. All in all, their dividend yield and payout ratio are fantastic for a well established stock.


CSCO has an ex-dividend date already announced for the quarter. Their ex-dividend date for this quarter is April 4th when they will issue $0.26/share. This is great because it means we can jump on the dividend payout right away and not have to wait a whole quarter to get a piece of the pie.

Dividend Growth:

They have been growing their dividend payouts for the last five years and this year is no different. Over the last three years, they have had an average annual growth of 17.9%. In 2014 they paid $0.74/share and in 2015, they paid $0.82/share. That's not bad at all in terms of growth.


Current Price: $26.80/share
52 Week Moving Average: $22.46-29.90/share

At the current price, CSCO is definitely at a discount. It's at a 10.37% discount to be precise. This means that if I decided to invest immediately, I could grab it for a pretty solid price. It's just too bad that I couldn't have grabbed the stock just a few weeks ago when it was down to the low of it's 52 week average. Now THAT would have been a discount!

Analysis of fundamentals:

EPS: 2.02
P/E Ratio: 13.28x

Historical growth over 5 years:
EPS: Up 5.61%
Revenue: Up 4.19%

Over all, CSCO has some solid numbers. Their EPS and P/E are right where I want them to be and historically, the stock has performed very well. Their balance sheet has been climbing for the past five years and they've kept their income moving upwards (except for a tiny glitch in 2014). With growing numbers and a good leader ahead of the company, I don't see any issues here and expect good things in the future from this performer.


I really like Cisco Systems. They are currently being sold at a solid discount, their dividends would be a good addition to the portfolio, and their historical numbers leave no fears in the back of my mind. Overall, I'd like to grab a stake in CSCO for the Cookie Jar. If I have some working income for investing at the end of the month after looking at the budget, I'd love to grab this up while it's positioned well.

1 comment:

  1. I would have loved to buy some CSCO in early Feb when the price was under $23! Sadly I didn't have money at the time so I just bought some recently at a much higher price.