Why NASDAQ:CSCO qualifies as a good dividend investing stock.

Last update: Nov 20, 2023

CISCO SYSTEMS INC (NASDAQ:CSCO) has caught the attention of dividend investors as a stock worth considering. NASDAQ:CSCO excels in profitability, solvency, and liquidity, all while providing a decent dividend. Let's delve into the details.

ChartMill's Evaluation of Dividend

An integral part of ChartMill's stock analysis is the Dividend Rating, which spans from 0 to 10. This rating evaluates diverse dividend factors, including yield, historical data, growth, and sustainability. NASDAQ:CSCO has received a 7 out of 10:

CSCO's Dividend Yield is rather good when compared to the industry average which is at 14.01. CSCO pays more dividend than 86.67% of the companies in the same industry.
CSCO's Dividend Yield is a higher than the S&P500 average which is at 2.65.
The dividend of CSCO is nicely growing with an annual growth rate of 12.07%!
CSCO has been paying a dividend for at least 10 years, so it has a reliable track record.
CSCO has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.

Analyzing Health Metrics

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NASDAQ:CSCO has earned a 8 out of 10:

CSCO has an Altman-Z score of 3.25. This indicates that CSCO is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of CSCO (3.25) is better than 80.00% of its industry peers.
CSCO has a debt to FCF ratio of 0.44. This is a very positive value and a sign of high solvency as it would only need 0.44 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.44, CSCO belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
A Debt/Equity ratio of 0.15 indicates that CSCO is not too dependend on debt financing.
CSCO does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Understanding NASDAQ:CSCO's Profitability

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NASDAQ:CSCO has earned a 9 out of 10:

Looking at the Return On Assets, with a value of 12.38%, CSCO belongs to the top of the industry, outperforming 90.00% of the companies in the same industry.
With an excellent Return On Equity value of 28.44%, CSCO belongs to the best of the industry, outperforming 93.33% of the companies in the same industry.
CSCO's Return On Invested Capital of 18.11% is amongst the best of the industry. CSCO outperforms 91.67% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CSCO is significantly above the industry average of 10.93%.
The 3 year average ROIC (16.86%) for CSCO is below the current ROIC(18.11%), indicating increased profibility in the last year.
CSCO has a Profit Margin of 22.13%. This is amongst the best in the industry. CSCO outperforms 95.00% of its industry peers.
CSCO's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 27.35%, CSCO belongs to the top of the industry, outperforming 96.67% of the companies in the same industry.
With an excellent Gross Margin value of 62.73%, CSCO belongs to the best of the industry, outperforming 88.33% of the companies in the same industry.

Every day, new Best Dividend stocks can be found on ChartMill in our Best Dividend screener.

For an up to date full fundamental analysis you can check the fundamental report of CSCO

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.