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Behind Cisco’s Financial Metrics

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Dividend yield

Cisco Systems (CSCO) now has a dividend yield of 3.4%, or $0.29, which indicates an annualized dividend payout of $1.16. Cisco has a dividend payout ratio of 55%, and its dividend yield has risen YoY (year-over-year) since 2011.

By comparison, Nokia (NOK), Ericsson (ERIC), IBM (IBM), and Juniper Networks (JNPR) have dividend yields of 3.8%, 1.1%, 4%, and 3.2%, respectively. Cisco has raised its dividend yield at a CAGR (compound annual growth rate) of 24.7% over the past three years.

At the end of fiscal 4Q17, Cisco had a cash balance of $70.5 billion, operating cash flow of $13.9 billion, and levered cash flow of $8.5 billion. Cisco’s total debt is at $33.7 billion, suggesting that the firm’s cash balance can easily meet interest and debt requirements.

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ROA, ROE, and PE ratio

Cisco’s ROA (return on assets) is 6.4%, and its ROE (return on equity) stands at 14.8%. The firm has a forward PE (price-to-earnings) ratio of 13.5x. Peers Ericsson, Juniper, IBM, and Nokia have forward PE ratios of 32.4x, 11.4x, 10.9x, and 15.3x, respectively.

Cisco has generated returns of 9.7% in the trailing 12 months, compared with the S&P 500’s (SPY) 19.8%. Cisco has a beta of 1.46, while Ericsson, Juniper, Nokia, and IBM have beta scores of 1.2, 1.5, 0.94, and 0.96, respectively.

Cisco is now trading at $34.4, which is 18.1% above its 52-week low of $29.1 and 1% below its 52-week high of $34.75.

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