74.59 USD
+0.26 (+0.35%)
74.2374 USD
-0.35 (-0.47%)
We assign a fundamental rating of 5 out of 10 to CSCO. CSCO was compared to 49 industry peers in the Communications Equipment industry. CSCO has an excellent profitability rating, but there are some minor concerns on its financial health. CSCO is not valued too expensively and it also shows a decent growth rate. Finally CSCO also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- CSCO had positive earnings in the past year.
- In the past year CSCO had a positive cash flow from operations.
- In the past 5 years CSCO has always been profitable.
- In the past 5 years CSCO always reported a positive cash flow from operatings.
1.2 Ratios
- The Return On Assets of CSCO (8.53%) is better than 83.33% of its industry peers.
- CSCO has a Return On Equity of 22.04%. This is amongst the best in the industry. CSCO outperforms 87.50% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 12.86%, CSCO belongs to the top of the industry, outperforming 85.42% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for CSCO is in line with the industry average of 12.15%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.53% | ||
| ROE | 22.04% | ||
| ROIC | 12.86% |
ROA(3y)9.67%
ROA(5y)10.49%
ROE(3y)24.29%
ROE(5y)25.65%
ROIC(3y)14.02%
ROIC(5y)15.13%
1.3 Margins
- With an excellent Profit Margin value of 17.90%, CSCO belongs to the best of the industry, outperforming 91.67% of the companies in the same industry.
- In the last couple of years the Profit Margin of CSCO has declined.
- Looking at the Operating Margin, with a value of 22.52%, CSCO belongs to the top of the industry, outperforming 91.67% of the companies in the same industry.
- In the last couple of years the Operating Margin of CSCO has declined.
- Looking at the Gross Margin, with a value of 64.85%, CSCO belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
- In the last couple of years the Gross Margin of CSCO has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.52% | ||
| PM (TTM) | 17.9% | ||
| GM | 64.85% |
OM growth 3Y-6.7%
OM growth 5Y-5.03%
PM growth 3Y-7.78%
PM growth 5Y-4.61%
GM growth 3Y1.26%
GM growth 5Y0.21%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so CSCO is still creating some value.
- CSCO has less shares outstanding than it did 1 year ago.
- The number of shares outstanding for CSCO has been reduced compared to 5 years ago.
- The debt/assets ratio for CSCO has been reduced compared to a year ago.
2.2 Solvency
- CSCO has a debt to FCF ratio of 2.21. This is a good value and a sign of high solvency as CSCO would need 2.21 years to pay back of all of its debts.
- The Debt to FCF ratio of CSCO (2.21) is better than 62.50% of its industry peers.
- CSCO has a Debt/Equity ratio of 0.46. This is a healthy value indicating a solid balance between debt and equity.
- CSCO has a Debt to Equity ratio of 0.46. This is in the lower half of the industry: CSCO underperforms 70.83% of its industry peers.
- Even though the debt/equity ratio score it not favorable for CSCO, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.46 | ||
| Debt/FCF | 2.21 | ||
| Altman-Z | N/A |
ROIC/WACC1.36
WACC9.49%
2.3 Liquidity
- A Current Ratio of 0.93 indicates that CSCO may have some problems paying its short term obligations.
- Looking at the Current ratio, with a value of 0.93, CSCO is doing worse than 89.58% of the companies in the same industry.
- A Quick Ratio of 0.83 indicates that CSCO may have some problems paying its short term obligations.
- With a Quick ratio value of 0.83, CSCO is not doing good in the industry: 87.50% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.93 | ||
| Quick Ratio | 0.83 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 10.20% over the past year.
- CSCO shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 3.50% yearly.
- The Revenue has grown by 8.91% in the past year. This is quite good.
- The Revenue has been growing slightly by 2.82% on average over the past years.
EPS 1Y (TTM)10.2%
EPS 3Y4.19%
EPS 5Y3.5%
EPS Q2Q%9.89%
Revenue 1Y (TTM)8.91%
Revenue growth 3Y3.19%
Revenue growth 5Y2.82%
Sales Q2Q%7.53%
3.2 Future
- The Earnings Per Share is expected to grow by 10.07% on average over the next years. This is quite good.
- The Revenue is expected to grow by 6.28% on average over the next years.
EPS Next Y10.59%
EPS Next 2Y9.4%
EPS Next 3Y8.63%
EPS Next 5Y10.07%
Revenue Next Year7.24%
Revenue Next 2Y6.15%
Revenue Next 3Y5.75%
Revenue Next 5Y6.28%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 19.17 indicates a rather expensive valuation of CSCO.
- Based on the Price/Earnings ratio, CSCO is valued a bit cheaper than 72.92% of the companies in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 27.21, CSCO is valued a bit cheaper.
- A Price/Forward Earnings ratio of 16.40 indicates a correct valuation of CSCO.
- Based on the Price/Forward Earnings ratio, CSCO is valued a bit cheaper than the industry average as 77.08% of the companies are valued more expensively.
- CSCO's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 24.26.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.17 | ||
| Fwd PE | 16.4 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, CSCO is valued a bit cheaper than 66.67% of the companies in the same industry.
- 68.75% of the companies in the same industry are more expensive than CSCO, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.15 | ||
| EV/EBITDA | 19.12 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The decent profitability rating of CSCO may justify a higher PE ratio.
PEG (NY)1.81
PEG (5Y)5.48
EPS Next 2Y9.4%
EPS Next 3Y8.63%
5. Dividend
5.1 Amount
- CSCO has a Yearly Dividend Yield of 2.18%.
- Compared to an average industry Dividend Yield of 0.76, CSCO pays a better dividend. On top of this CSCO pays more dividend than 85.42% of the companies listed in the same industry.
- CSCO's Dividend Yield is a higher than the S&P500 average which is at 1.81.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.18% |
5.2 History
- The dividend of CSCO has a limited annual growth rate of 2.65%.
- CSCO has paid a dividend for at least 10 years, which is a reliable track record.
- CSCO has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)2.65%
Div Incr Years13
Div Non Decr Years13
5.3 Sustainability
- CSCO pays out 62.56% of its income as dividend. This is not a sustainable payout ratio.
- CSCO's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP62.56%
EPS Next 2Y9.4%
EPS Next 3Y8.63%
CISCO SYSTEMS INC / CSCO FAQ
What is the ChartMill fundamental rating of CISCO SYSTEMS INC (CSCO) stock?
ChartMill assigns a fundamental rating of 5 / 10 to CSCO.
What is the valuation status of CISCO SYSTEMS INC (CSCO) stock?
ChartMill assigns a valuation rating of 5 / 10 to CISCO SYSTEMS INC (CSCO). This can be considered as Fairly Valued.
How profitable is CISCO SYSTEMS INC (CSCO) stock?
CISCO SYSTEMS INC (CSCO) has a profitability rating of 7 / 10.
What are the PE and PB ratios of CISCO SYSTEMS INC (CSCO) stock?
The Price/Earnings (PE) ratio for CISCO SYSTEMS INC (CSCO) is 19.17 and the Price/Book (PB) ratio is 6.29.
Can you provide the financial health for CSCO stock?
The financial health rating of CISCO SYSTEMS INC (CSCO) is 4 / 10.