Morgan Stanley Reaffirms “Overweight” Rating for Cisco (CSCO)

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Morgan Stanley reported on Monday that they have maintained their rating for networking equipment giant, Cisco Systems, Inc.( CSCO ).

The firm reported that they have reaffirmed their "Overweight" rating and $22 price target for CSCO. This price target suggests a 9% increase from the stock's current price of $19.90.

A Morgan Stanley analyst commented, "CEO Chambers was confident and upbeat at Cisco's NYC analyst day, and focused on how services and software help keep GM stable, while a tight grip on opex takes op margin to the 'high 20s,' vs. current guidance of "mid-20s," matching our est. Stable rev, a 3%+ div yld, and reasonable val keep us OW."

Cisco is a technology company which designs, manufactures, and sells networking equipment. In its most recent quarter, CSCO reported Q4 earnings of $1.92 billion, or 36 cents per share, and revenue of $11.7 billion.

Cisco shares were up 12 cents, or 0.61% during premarket trading Tuesday. The stock is up 9.46% YTD.

Cisco Dividend In Focus

Cisco paid out a dividend of 14 cents per share in the last quarter , equaling a dividend yield of about 2.83%. The company increased its quarterly dividend from 8 cents per share to 14 cents per share in October. CSCO will pay its next dividend of 14 cents on December 19. The stock went ex-dividend on November 27. (view the Ex-Dividend Tool for information on all upcoming ex-dividend dates).

Recent Cisco dividends include:

  • October 24, 2012: $0.14
  • July 25, 2012: $0.08
  • April 25, 2012: $0.08

Since Cisco began paying dividends in 2011, they have slowly been increasing payout amounts, raising payout ratios:

Year Dividend ($M) Payout Ratio
2011 $667 10.3%
2012 $1513 18.8%

Cisco vs. The Competition has identified Hewlett Packard( HPQ ) and IBM Corp( IBM ) as direct competitors of Cisco. CSCO ranks below HPQ in dividend yield, but was rated higher on the DARS™ rating system. IBM ranks higher on the DARS™ rating system, but falls below CSCO with its dividend yield.

Ticker Company Yield DARS
CSCO Cisco 2.83% 3.2
HPQ Hewlett Packard 3.74% 2.8
IBM IBM 1.77% 3.4

Use the screener to see all dividend-paying consumer goods stocks, or run other custom searches for dividend-paying stocks.

Cisco Systems, Inc.( CSCO ) is not recommended at this time, holding a DARS™ Rating of 3.2 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Stocks

Referenced Stocks: CSCO

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