In 2009, a select group of companies started doing something
They created a
with billions of dollars inside it -- one of the largestcash
stockpiles on Earth.
They did it, because these companies are seeing the same
problems you are -- a mounting debt crisis in the United States and
Europe... gridlock on Capitol Hill... and a see-sawingstock market
that has gone virtually nowhere.
Facing these challenges and many more, they took action to
protect themselves and their shareholders.
For the past few years now, they've been adding billions to the
"Dividend Vault" at a rapid pace. One of them even poured in $22.9
billion in a single quarter in 2011. With that kind ofmoney being
added, you can imagine how big the "Dividend Vault" has become. (To
read my previous article on the "Dividend Vault",
Today I'd like to tell you about one of these companies...
This well-known tech giant is one of the world's largest
Internet equipment providers. Chances are, you're using one of its
products right now. But I'm not here to talk to you about this
What's important to know is that with a 67%market share , this
company dominates its field. In fact, it is by far the largest
player in its industry.
It's also involved in a high-margin business. As a result, this
company generates massive amounts of cash every quarter. And
management is doing everything it can to return that money to
Let me explain...
During one of the most difficult business climates ever, the
company has generatednet income of up to $8 billion a year and has
bought back more than 2 billionshares of stock... including $4.4
billion worth of stock in 2012 alone.
Right now, this company is more profitable than such well-known
success stories as
American Express (
Bank of America (
... just to name a few.
That kind of dominance has drawn the attention of the world's
Donald Yacktman runs a $9 billionmutual fund that has beaten 99%
of its peers during the past 15 years. Through the YacktmanAsset
Management Co., the billionaire recently added 6 million shares of
this company's stock. This makes seven times in two years that the
renowned stock picker has increased his position, which now sits at
52 million shares.
Ken Fisher, a billionaire investor and long-time columnist for
Forbes magazine, also recently purchased shares of this stock.
Through his company, Fisher Asset Management, he added 16 million
shares just a few months ago. He now owns more than 66 million
It's easy to see why these billionaires are so high on this
stock right now. As of today,
Cisco Systems (Nasdaq: CSCO)
has accumulated $45 billion in cash... which comes out to a
whopping $8.48 per share.
That's enough money to pay every shareholder a 45%special
dividend right now.
For years, Cisco has been vaulting away most of this cash. But
In 2011, the company announced its first dividend payment. And
since then, it's already raised its dividend twice, a total
increase of 133%. That's enough to turn a $1,000 dividend stream
Even after more than doubling its payout, the company still has
$45 billion sitting in its "Dividend Vault." As this vault grows, I
think Cisco's payoutswill continue to increase for years.
Of course, withinvesting there's never a surefire thing. There's
no quality a company can possess that willguarantee its
Action to Take -->
But when you can find companies like Cisco, which dominate their
market and are returning billions to investors, these are the sort
ofstocks that can still deliver strong returns in nearly any market
-- including this one.
I recommend buying the stock up to $23 a share with aprice
target of $33 a share.
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