June 28, 2026 a 07:46 am
CSCO: Dividend Analysis - Cisco Systems, Inc.
Cisco Systems, Inc. (CSCO) stands as a significant player in the tech sector with a stable dividend record. The company offers a steady dividend yield and has a history of consistent dividend growth, making it a potentially attractive option for income-focused investors. Nevertheless, one should also consider factors like the payout ratios and company growth prospects to gauge the sustainability of these dividends.
Overview 📊
This section provides a snapshot of Cisco's dividend metrics alongside an analysis of its sector placement.
| Metric | Details |
|---|---|
| Sector | Technology |
| Dividend yield | 1.46 % |
| Current dividend per share | 1.62 USD |
| Dividend history | 16 years |
| Last cut or suspension | None |
Dividend History 📈
Cisco's dividend history reveals reliability and a commitment to returning value to shareholders, factors that are vital for long-term income investors.
| Year | Dividend per Share (USD) |
|---|---|
| 2026 | 1.25 |
| 2025 | 1.63 |
| 2024 | 1.59 |
| 2023 | 1.55 |
| 2022 | 1.51 |
Dividend Growth 🗣️
Dividend growth is a critical measure of a company's ability to increase payouts, reflecting both financial health and positive future prospects.
| Time | Growth |
|---|---|
| 3 years | 2.58 % |
| 5 years | 2.65 % |
The average dividend growth is 2.65% over 5 years. This shows moderate but steady dividend growth.
Payout Ratio 🧐
Payout ratios provide insight into the sustainability of a company's dividends relative to its earnings and cash flow.
| Key Figure | Ratio |
|---|---|
| EPS-based | 53.53 % |
| Free cash flow-based | 50.58 % |
The EPS payout ratio of 53.53% and FCF payout ratio of 50.58% suggest a sustainable dividend policy within a manageable payout range.
Cashflow & Capital Efficiency 📉
Understanding cashflow metrics and capital efficiency is crucial for assessing a company's operational health and its potential to maintain dividend payouts.
| Year | 2025 | 2024 | 2023 |
|---|---|---|---|
| Free Cash Flow Yield | 4.87 % | 5.27 % | 8.93 % |
| Earnings Yield | 3.73 % | 5.33 % | 5.92 % |
| CAPEX to Operating Cash Flow | 6.38 % | 6.16 % | 4.27 % |
| Stock-based Compensation to Revenue | 6.43 % | 5.71 % | 4.13 % |
| Free Cash Flow / Operating Cash Flow Ratio | 93.62 % | 93.84 % | 95.73 % |
Overall, Cisco shows robust cashflow stability and efficient capital use, crucial for sustaining future dividend payments.
Balance Sheet & Leverage Analysis ⚖️
Evaluating the balance sheet is essential to understanding Cisco's financial health, including its ability to service debt and maintain liquidity.
| Year | 2025 | 2024 | 2023 |
|---|---|---|---|
| Debt-to-Equity | 0.60 | 0.68 | 0.19 |
| Debt-to-Assets | 0.23 | 0.25 | 0.08 |
| Debt-to-Capital | 0.37 | 0.41 | 0.16 |
| Net Debt to EBITDA | 1.28 | 1.49 | -0.10 |
| Current Ratio | 0.92 | 0.83 | 1.27 |
| Quick Ratio | 0.91 | 0.83 | 1.27 |
| Financial Leverage | 2.61 | 2.74 | 2.30 |
Cisco maintains a conservative leverage position, with improving debt metrics indicating sound financial health.
Fundamental Strength & Profitability 💹
Cisco's profitability metrics underscore its capability to generate value for shareholders over the long term, which is vital for sustained dividend growth.
| Year | 2025 | 2024 | 2023 |
|---|---|---|---|
| Return on Equity | 21.73 % | 22.70 % | 28.44 % |
| Return on Assets | 8.32 % | 8.29 % | 12.38 % |
| Margins: Net | 17.97 % | 19.18 % | 22.13 % |
| Margins: EBIT | 22.09 % | 24.61 % | 27.62 % |
| Margins: EBITDA | 27.14 % | 29.27 % | 30.65 % |
| Margins: Gross | 64.94 % | 64.73 % | 62.73 % |
| Research & Development to Revenue | 16.41 % | 14.84 % | 13.25 % |
Strong metrics in profitability demonstrate Cisco's capacity to convert revenues effectively into profits, underscoring its fundamental strength.
Price Development 📉
Dividend Scoring System ✅
An assessment of Cisco's dividend prospects based on several criteria yields insights into overall income potential.
| Category | Score | Score Bar |
|---|---|---|
| Dividend yield | 2 | |
| Dividend Stability | 4 | |
| Dividend growth | 3 | |
| Payout ratio | 5 | |
| Financial Stability | 5 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Overall Score: 32/40
Rating 💼
Cisco Systems, Inc. presents an overall strong dividend profile with a stable financial foundation supporting its payouts. While the modest yield might not appeal to high-income seekers, the firm’s reliability and gradual growth make it a suitable choice for those seeking dependable income with growth potential. Investors should continue to monitor key financial aspects and operational performance.
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