May 28, 2025 a 11:31 am
CSCO: Dividend Analysis - Cisco Systems, Inc.
Cisco Systems, Inc. demonstrates a strong dividend profile with a commendable history of consistent payouts, supported by a robust market capitalization of $252 billion. Despite market fluctuations, their long-standing dividend history of 15 years highlights a commitment to returning value to shareholders. The dividend yield of 2.54% positions Cisco as an attractive option for income-focused investors.
📊 Overview
Cisco Systems, Inc. operates in the technology sector, leveraging its strong market position to maintain a combination of growth and stability. A key highlight is its dividend yield of 2.54%, with a current dividend per share reaching $1.58 USD. With a solid 15-year dividend history and no record of cuts or suspensions, Cisco showcases resilience and dependability in its dividend practices.
| Data | Value |
|---|---|
| Sector | Technology |
| Dividend Yield | 2.54 % |
| Current Dividend Per Share | 1.58 USD |
| Dividend History | 15 years |
| Last Cut or Suspension | None |
🗣️ Dividend History
Understanding Cisco's dividend history is crucial for assessing its reliability and the potential for future income. The company's trend of increasing dividends yearly reflects its financial health and shareholder value commitment.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 1.22 |
| 2024 | 1.59 |
| 2023 | 1.55 |
| 2022 | 1.51 |
| 2021 | 1.47 |
📈 Dividend Growth
Dividend growth is indicative of a company's earnings momentum and strategic focus on increasing shareholder returns. Cisco's dividends have grown by approximately 2.65% over the past three years and 2.87% over five years, marking a stable upward trend.
| 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
The payout ratio is pivotal in understanding how securely a company can support its dividend payouts from earnings and cash flow. Cisco's EPS-based payout ratio stands at 64.20%, while the FCF-based ratio is more conservative at 46.35%.
| Key Figure | Ratio |
|---|---|
| EPS-based | 64.20 % |
| Free Cash Flow-based | 46.35 % |
An EPS payout ratio of 64.20% coupled with an FCF ratio of 46.35% indicates a sustainable dividend policy supported by both profits and cash flow.
💡 Cashflow & Capital Efficiency
Cisco's capital efficiency metrics reveal vital insights into how capital intensive and cash-generative the company operations are. Key ratios help evaluate operational efficiency and the ability to generate free cash flow.
| Year | 2022 | 2023 | 2024 |
|---|---|---|---|
| Free Cash Flow Yield | 6.74% | 8.93% | 5.27% |
| Earnings Yield | 6.24% | 5.92% | 5.33% |
| CAPEX to Operating Cash Flow | 3.61% | 4.27% | 6.16% |
| Stock-based Compensation to Revenue | 3.66% | 4.13% | 5.71% |
| Free Cash Flow/Operating Cash Flow Ratio | 96.39% | 95.73% | 93.84% |
Cisco exhibits robust cash flow and capital efficiency, crucial indicators of its ability to generate cash from operations and reinvest into development efficiently.
🔍 Balance Sheet & Leverage Analysis
Balance sheet strength is essential for evaluating Cisco's financial resilience, with debt metrics providing insights into credit risk and management effectiveness.
| Year | 2022 | 2023 | 2024 |
|---|---|---|---|
| Debt-to-Equity | 23.92% | 18.92% | 68.11% |
| Debt-to-Assets | 10.12% | 8.24% | 24.89% |
| Debt-to-Capital | 19.30% | 15.91% | 40.52% |
| Net Debt to EBITDA | 0.15 | -0.10 | 1.49 |
| Current Ratio | 1.43 | 1.38 | 0.91 |
| Quick Ratio | 1.33 | 1.27 | 0.83 |
| Financial Leverage | 2.36 | 2.30 | 2.74 |
Stable leverage with low Debt-to-Equity and strong coverage ratios underscores Cisco's solid financial foundation, ensuring liquidity and operational management.
📈 Fundamental Strength & Profitability
Key profitability ratios showcase Cisco's efficiency and competitive advantage in the technology space, illuminating its potential to deliver consistent returns.
| Year | 2022 | 2023 | 2024 |
|---|---|---|---|
| Return on Equity | 29.70% | 28.44% | 22.70% |
| Return on Assets | 12.57% | 12.38% | 8.29% |
| Net Margin | 22.91% | 22.13% | 19.18% |
| EBIT Margin | 28.78% | 27.62% | 24.61% |
| EBITDA Margin | 32.57% | 30.65% | 29.27% |
| Gross Margin | 62.55% | 62.73% | 64.73% |
| R&D to Revenue | 13.14% | 13.25% | 14.84% |
Cisco's high profitability ratios reflect strong operational efficiency and effective cost management, providing a competitive edge in the saturated tech market.
📉 Price Development
🔍 Dividend Scoring System
Our dividend scoring system evaluates Cisco on key criteria to help investors make informed decisions.
| Criteria | Score | Details |
|---|---|---|
| Dividend Yield | 3 | |
| Dividend Stability | 5 | |
| Dividend Growth | 4 | |
| Payout Ratio | 4 | |
| Financial Stability | 5 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 5 |
Total Score: 35/40
✅ Rating
Cisco Systems, Inc. stands out with a solid dividend profile, characterized by stability and consistent growth. Its strong financial health and reliability make it a recommendable choice for dividend-seeking investors who also value capital preservation and potential price appreciation.