April 26, 2025 a 02:46 am
CSCO: Dividend Analysis - Cisco Systems, Inc.
Cisco Systems, Inc. presents a compelling dividend profile, underlined by its robust dividend payment history and moderate growth. The company has consistently distributed dividends over the last 15 years, showcasing stability and shareholder commitment. Although the dividend yield of 2.81% does not categorize Cisco as a high-yield stock, the steady historical growth and commitment to increased payouts strengthen its investment appeal.
📊 Overview
Cisco Systems operates within the technology sector, offering moderate but steady dividend growth and a reliable payout history.
| Parameter | Details |
|---|---|
| Sector | Technology |
| Dividend yield | 2.81% |
| Current dividend per share | 1.58 USD |
| Dividend history | 15 years |
| Last cut or suspension | None |
📉 Dividend History
The stability of Cisco's dividend history highlights its strong financial health and commitment to returning value to shareholders.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 0.81 |
| 2024 | 1.59 |
| 2023 | 1.55 |
| 2022 | 1.51 |
| 2021 | 1.47 |
📈 Dividend Growth
Cisco's dividend growth rate over the last three and five years underscores a moderate yet stable increase, signaling potential for future growth.
| Time | Growth |
|---|---|
| 3 years | 2.65% |
| 5 years | 2.87% |
The average dividend growth is 2.87% over 5 years. This shows moderate but steady dividend growth.
Payout Ratio
A critical element in assessing a company's dividend sustainability is its payout ratio. Cisco's EPS and Free Cash Flow (FCF) based payout ratios reflect its capability to sustain dividend payouts without compromising financial stability.
| Key figure | Ratio |
|---|---|
| EPS-based | 68.42% |
| Free cash flow-based | 47.46% |
With a 68.42% EPS payout ratio and a 47.46% FCF payout ratio, Cisco maintains a robust balance between reward to shareholders and retained earnings.
🗣️ Cashflow & Capital Efficiency
Understanding Cisco's cash flow dynamics and capital efficiency is crucial in evaluating the sustainability and growth potential of its dividends.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 5.27% | 8.93% | 6.74% |
| Earnings Yield | 5.33% | 5.92% | 6.24% |
| CAPEX to Operating Cash Flow | 6.16% | 4.27% | 3.61% |
| Stock-based Compensation to Revenue | 5.71% | 4.13% | 3.66% |
| Free Cash Flow / Operating Cash Flow Ratio | 93.84% | 95.73% | 96.39% |
Cisco's efficient capital allocation ensures that dividends are well-covered by cash flows, reflecting prudent management practices and financial health.
📈 Balance Sheet & Leverage Analysis
Evaluating Cisco's balance sheet provides insights into its financial stability and capacity to withstand economic volatility while sustaining dividend payouts.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.68 | 0.19 | 0.24 |
| Debt-to-Assets | 0.25 | 0.08 | 0.10 |
| Debt-to-Capital | 0.41 | 0.16 | 0.19 |
| Net Debt to EBITDA | 1.49 | -0.10 | 0.15 |
| Current Ratio | N/A | 1.38 | 1.43 |
| Quick Ratio | 0.83 | 1.27 | 1.33 |
| Financial Leverage | 2.74 | 2.30 | 2.36 |
Cisco's proactive debt management and liquidity ratios demonstrate its financial resilience, supporting reliable dividend payments even in uncertain market conditions.
🗣️ Fundamental Strength & Profitability
Analyzing profitability and fundamental strength helps in gauging Cisco's overall operational success and its ability to generate returns on investments and accumulated equity.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity (ROE) | 22.70% | 28.44% | 29.70% |
| Return on Assets (ROA) | 8.29% | 12.38% | 12.57% |
| EBIT Margin | 24.61% | 27.62% | 28.78% |
| EBITDA Margin | 29.27% | 30.65% | 32.57% |
| Gross Margin | 64.73% | 62.73% | 62.55% |
| R&D to Revenue | 14.84% | 13.25% | 13.14% |
Cisco's solid profitability metrics and active investment in R&D assure strong competitive positioning, fostering continued innovation and value creation.
📈 Price Development
Dividend Scoring System
| Criteria | Score | Score Bar |
|---|---|---|
| Dividend yield | 3 | |
| Dividend Stability | 4 | |
| Dividend growth | 3 | |
| Payout ratio | 4 | |
| Financial stability | 5 | |
| Dividend continuity | 4 | |
| Cashflow Coverage | 5 | |
| Balance Sheet Quality | 5 |
Total Score: 33/40
✅ Rating
Given its reliable dividend history, solid financial health, and prudent management practices, Cisco Systems, Inc. stands as a strong dividend-paying company with a stable outlook. It is recommended for investors seeking consistent dividends and long-term stability.