June 24, 2025 a 11:31 am
📊 CSCO: Dividend Analysis - Cisco Systems, Inc.
Cisco Systems, Inc. offers a steady dividend yield and shows moderate dividend growth over recent years. With a consistent dividend history and a manageable payout ratio, the financial stability and cash flow coverage suggest a reliable income stream. Investors may find its sector position and market presence compelling for dividend investment portfolios.
Overview
🗣️ Cisco operates within the technology sector, a field known for innovation but rigorous competition. The company's dividend profile is highlighted by a dividend yield of 2.40%, which is attractive for income-focused investors. The current dividend per share stands at 1.58 USD, upheld consistently over 15 years, despite no recent cuts or suspensions.
| Metric | Details |
|---|---|
| Sector | Technology |
| Dividend yield | 2.40% |
| Current dividend per share | 1.58 USD |
| Dividend history | 15 years |
| Last cut or suspension | None |
Dividend History
📈 Reviewing historical dividend payments can offer insights into a company’s commitment to returning value to shareholders. Stability or growth in dividends often suggests financial robustness and prioritizing shareholder returns.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 1.22 |
| 2024 | 1.59 |
| 2023 | 1.55 |
| 2022 | 1.51 |
| 2021 | 1.47 |
Dividend Growth
📈 Monitoring dividend growth is crucial for predicting future income streams. Cisco's dividend growth rates over 3 and 5 years reflect a balance between reinvestment in business opportunities and providing returns to shareholders.
| 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, reflecting a sustainable policy by the company.
Payout Ratio
📉 The payout ratio provides insight into how well a company can sustain its dividend payments. Cisco’s payout ratio stands at 64.20% based on EPS and 48.84% based on FCF.
| Key figure | Ratio |
|---|---|
| EPS-based | 64.20% |
| Free cash flow-based | 48.84% |
✅ With a payout ratio of 64.20% (EPS) and 48.84% (FCF), the company maintains a balanced approach to dividend payments, ensuring enough retained earnings for growth while providing steady returns to shareholders.
Cashflow & Capital Efficiency
🔍 Analyzing cash flow and capital efficiency helps determine the sustainability of dividend payments and capital investments. Strong cash flow indicates the company’s ability to cover dividends and investments.
| 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% |
✅ The strength in free cash flow ensures Cisco has the resources to maintain dividend payments and invest in growth, underlining the robustness of its business model.
Balance Sheet & Leverage Analysis
🔍 Cisco's balance sheet is indicative of its financial stability and capability to meet obligations. The leverage ratios provide insight into risk management and capital structure.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 68.11% | 18.92% | 23.92% |
| Debt-to-Assets | 24.89% | 8.24% | 10.12% |
| Debt-to-Capital | 40.52% | 15.91% | 19.30% |
| Net Debt to EBITDA | 1.49x | -0.10x | 0.15x |
| Current Ratio | 0.908 | 1.385 | 1.432 |
| Quick Ratio | 0.825 | 1.268 | 1.332 |
⚠️ Cisco's financial leverage, alongside its healthy coverage ratios, points to a strong liquidity position, reducing potential risks associated with debt obligations.
Fundamental Strength & Profitability
📈 Cisco’s fundamental strengths underline its profitability, with notable returns on equity and assets. These factors are essential for assessing the company's competitive advantage and growth potential.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 22.70% | 28.44% | 29.70% |
| Return on Assets | 8.29% | 12.38% | 12.57% |
| Net Profit Margin | 19.18% | 22.13% | 22.91% |
| Gross Profit Margin | 64.73% | 62.73% | 62.55% |
| EBIT Margin | 24.61% | 27.62% | 28.78% |
| EBITDA Margin | 29.27% | 30.65% | 32.57% |
| Research & Development to Revenue | 14.84% | 13.25% | 13.14% |
✅ High return on equity and substantial profit margins highlight Cisco's ability to generate profits efficiently, strengthening its position within the tech industry.
Price Development
Dividend Scoring System
| Category | Score | Score Bar |
|---|---|---|
| Dividend yield | 3 | |
| Dividend Stability | 4 | |
| Dividend growth | 3 | |
| Payout ratio | 4 | |
| Financial stability | 4 | |
| Dividend continuity | 4 | |
| Cashflow Coverage | 5 | |
| Balance Sheet Quality | 4 |
Total Score: 31/40
Rating
✅ Cisco Systems, Inc. is a reliable dividend-paying stock, offering a stable income stream with reasonable growth potential. Its strategic financial management and sector leadership make it a compelling choice for dividend investors seeking stability.