Technology companies are not known for paying dividends, but
some big caps in the tech space do return cash to shareholders
One of them is networking giantCisco Systems (
), which announced a big jolt to its dividend late Wednesday,
when it reported quarterly results.
As part of a strategy aimed at giving back cash to
shareholders, Cisco boosted its quarterly dividend by a whopping
75% to 14 cents a share. The dividend will be paid Oct. 24 to
shareholders of record Oct. 4.
The hike represents a more than doubling of its payout since
the company started paying dividends in April 2011.
"Cisco has the financial strength and flexibility to
effectively invest in our business, pursue strategic
opportunities, such as acquisitions, as well as return a minimum
of 50% of our free cash flow annually through dividends and share
repurchases to our shareholders," said Chief Financial Officer
and Executive Vice President Frank Calderoni in a press
During its fiscal 2012 ended in July, the company paid $1.5
billion in dividends to shareholders and bought back $4.4 billion
of its own shares.
On an annualized basis, Cisco pays 56 cents a share for a
yield of about 3.2%. Cisco's yield is higher than that of other
dividend-paying big-cap techs. Chip gear makerApplied Materials (
) has a 3.1% yield andMicrosoft's (
) is 2.6%.Apple (
), which just paid its first shareholder dividend in 17 years,
has a 1.7% yield.
Cisco's dividend raise was announced the same day as its
fiscal fourth-quarter results. Earnings grew 17% to 47 cents a
share, 2 cents above views. Sales rose 4% to $11.69 billon.
Top-line growth was the slowest in four quarters, but still
topped expectations. Although Cisco's quarterly earnings growth
has been uneven in recent years, it remains relatively
The company gave a lukewarm sales guidance and warned of tough
business conditions in Europe over the next few quarters.
Cisco's stock jumped to a three-month high Thursday and is
building the right side of a new base.