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A Look at Cisco System’s Dividends and Share Repurchases

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Feb. 22 2018, Updated 10:32 a.m. ET

Cisco returned $5.4 billion to shareholders in fiscal 2Q18

In fiscal 2Q18, Cisco Systems (CSCO) returned $5.4 billion to shareholders. This included $4.0 billion in share repurchases and $1.4 billion as quarterly dividends. 

Cisco also announced an increase of $0.04 per share in dividends, an increase of 14% YoY (year-over-year). Cisco’s quarterly dividend is now $0.33 per share, indicating a dividend yield of 3.1%.

Cisco’s dividend payout ratio stands at 59.2%, and the firm has increased its dividends for seven consecutive years. Among its peers, Microsoft (MSFT), Juniper (JNPR), and Hewlett Packard Enterprise (HPE) have dividend yields of 1.8%, 2.7%, and 1.8%, respectively.

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Increase in share repurchase program

Cisco announced a $25.0 billion increase to its existing share repurchase program. Cisco expects to repurchase $31.0 billion in shares over the next 18–24 months. 

Cisco’s CFO, Kelly Kramer, stated, “This significant dividend increase and additional share repurchase authorization reinforces our commitment to returning capital to our shareholders and are confident in the strength and stability of our ongoing cash flows.”

Cisco repurchased shares worth ~$9.2 billion in fiscal 2017. The firm has already repurchased $8.5 billion in shares in the first two quarters of fiscal 2018. 

Cisco has reported revenue and EPS (earnings per share) growth in two consecutive quarters. Analysts expect its revenue growth to continue in fiscal 2018 and fiscal 2019, driven by its focus on strategic priorities.

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