Key Takeaways
📈 Cisco offers a stable dividend yield of 2.94% with consistent annual growth, supported by a healthy payout ratio of about 70%.
💵 Cisco maintains robust cash flow, generating $13.6 billion in operating cash flow, which comfortably supports dividends and share buybacks.
📊 Analysts remain moderately bullish, with recent upgrades highlighting Cisco’s growth potential in AI and cybersecurity.
📋 Cisco’s recent earnings beat expectations, posting quarterly revenue growth of 9.4% and stronger-than-expected EPS driven by rising demand for AI infrastructure.
👨💼 CEO Chuck Robbins and CFO Scott Herren lead an experienced management team focused on strategic shifts into recurring revenue, AI, and long-term value creation.
Updated 4/21/25
Cisco Systems (CSCO) has quietly built a reputation for delivering steady performance, reliable income, and long-term resilience in a competitive tech landscape. With a market cap over $220 billion and a forward dividend yield near 3%, it blends strong free cash flow with shareholder-friendly policies like consistent dividend growth and buybacks.
Over the past year, the stock has climbed more than 15%, supported by solid execution, strategic shifts into AI and cybersecurity, and a leadership team focused on long-term value creation. As the company leans deeper into recurring revenue and next-gen infrastructure, it continues to show why it remains a relevant player for investors looking for both income and stability.
Recent Events
In the most recent quarter, Cisco posted revenue of $54.18 billion over the trailing twelve months, with net income at $9.19 billion. That said, earnings growth has dipped by nearly 8% year-over-year — a sign that the company is working through a more cautious environment. Still, these figures represent a business that’s far from struggling. The fundamentals are solid, and the cash flow continues to be a major strength.
Operating cash flow came in at $13.6 billion, while levered free cash flow wasn’t far behind at $13.29 billion. These aren’t small numbers. They show that Cisco isn’t just profitable on paper — it’s generating real, usable cash that supports its dividend and offers room for reinvestment or buybacks.
The balance sheet tells a steady story. While debt totals about $32.4 billion, Cisco is sitting on $17.64 billion in cash, providing plenty of breathing room. A current ratio of 0.87 is a bit tight, but manageable given the company’s liquidity. The dividend, as expected, is right on schedule, with the next payout landing on April 23, 2025. Shares recently traded around $54.13, down a few points on the day, but still up over 15% in the last year — a quiet performer, not a headline-grabber.
Key Dividend Metrics
📈 Forward Dividend Yield: 2.94%
💵 Forward Annual Dividend: $1.64 per share
🛡 Payout Ratio: 70.18%
📊 5-Year Average Dividend Yield: 3.03%
📅 Next Dividend Date: April 23, 2025
⚖️ Ex-Dividend Date: April 3, 2025
🚀 Most Recent Dividend Growth: 3.8% year-over-year
Dividend Overview
With a forward yield of just under 3%, Cisco may not seem like a high-yield pick at first glance, but that number sits right in line with its five-year average. It’s not a flashy dividend, but it’s stable — and it comes from a company that generates serious free cash flow year after year.
The current payout ratio of a little over 70% is a bit elevated, though not alarming. For a tech company that isn’t focused on reinvesting all its profits into growth, that level is more than acceptable. Plus, Cisco’s commitment to keeping the dividend flowing is evident in its consistency. Every quarter, rain or shine, the company delivers.
Cisco’s 0.85 beta offers another angle of appeal — it tends to move less than the broader market, which adds a layer of stability to a portfolio. It’s not often you find a tech stock with this kind of income potential and lower volatility.
Dividend Growth and Safety
When it comes to dividend growth, Cisco has been modest but dependable. The last increase came in at just under 4%, and while that’s not going to blow anyone away, the bigger picture is more impressive. The company has been raising its dividend every year since it started paying one in 2011 — that’s a 14-year streak with no breaks.
It’s not growing at double-digit rates like some younger dividend names, but it doesn’t need to. The key here is sustainability. Cisco is covering its dividend easily with free cash flow. There’s no financial engineering happening here — the money’s there, and the company keeps handing it back to shareholders.
Debt is under control, cash is plentiful, and earnings, even with a recent dip, are strong enough to keep things moving forward. The short interest is low, and institutional ownership is high at nearly 80%. That kind of ownership base usually means fewer surprises and a bit of built-in price support during market turbulence.
Cisco’s approach is measured and reliable. It’s not trying to chase growth it can’t sustain, nor is it stretching itself to maintain its dividend. Instead, it’s running a well-balanced operation that leans into its strengths — and that’s what income investors tend to appreciate.
Overall, Cisco represents the kind of company you don’t need to babysit. It won’t steal the spotlight, but it will keep doing its job quarter after quarter. For investors building a portfolio designed to deliver consistent income and steady total return, Cisco continues to deserve a seat at the table.
Cash Flow Statement
Over the trailing twelve months, Cisco Systems generated $13.6 billion in operating cash flow, reflecting solid business fundamentals and continued demand across its core segments. While this figure marks a rebound from the prior year’s $10.88 billion, it still trails earlier highs, indicating a more measured pace of cash generation post-pandemic. Free cash flow was nearly in lockstep at $12.81 billion, demonstrating efficiency and relatively low capital spending, with just $793 million in capital expenditures.
Investing activities posted a significant outflow of $22.14 billion, largely driven by acquisitions and other long-term investments. This is notably higher than previous years and signals a push to reposition parts of the business. On the financing side, Cisco issued $39.69 billion in debt, offset by $23.6 billion in repayments, and returned $7.52 billion to shareholders via share buybacks. Its ending cash position stood at $9.52 billion, up modestly from the prior year. Altogether, the statement reflects a company investing heavily in its future while maintaining strong cash flow discipline and a consistent return strategy.
Analyst Ratings
Cisco Systems has recently seen a mix of analyst activity, with several firms adjusting their outlooks based on the company’s performance and market dynamics. 📈 Rosenblatt Securities upgraded the stock from Neutral to Buy, raising the price target from $66 to $80. This upgrade reflects growing confidence in Cisco’s potential to benefit from rising demand in AI infrastructure and cloud networking, areas where the company is expanding its footprint.
📉 On the more cautious side, JPMorgan Chase & Co. held its Overweight rating but trimmed the price target from $73 to $70. While still optimistic, the firm pointed to broader market volatility as a reason for tempering short-term expectations. Likewise, Citigroup maintained its Buy rating but revised its target from $73 to $68, signaling a more balanced view that accounts for both Cisco’s strong fundamentals and the current economic backdrop.
💬 Across the board, the consensus among analysts currently leans toward a moderate buy rating. The average price target sits at approximately $65.58, indicating an expectation of gradual upside. This reflects a belief that Cisco’s strategy, solid cash flow, and steady dividend policy will continue to appeal to investors looking for stability and income in the tech sector.
Earning Report Summary
A Strong Quarter That Beat Expectations
Cisco’s latest earnings report for the second quarter of fiscal 2025 came in stronger than many expected. The company brought in $14 billion in revenue, a solid 9.4% increase from the same quarter last year. Earnings per share landed at $0.94, which beat the expected $0.91. For a company that often gets labeled as a slow mover in tech, these results are a reminder that Cisco is still very much in the game.
Leadership sounded confident about where things are headed. CEO Chuck Robbins noted that revenue, margins, and earnings all hit or exceeded the top end of their guidance, pointing to healthy demand across Cisco’s business lines. AI infrastructure, in particular, was a standout, helping drive strong growth in recurring revenue streams — always a good sign for long-term stability.
Tapping Into the AI Surge
Cisco isn’t sitting still when it comes to AI. This quarter, the company leaned into that space by teaming up with Mistral, a French AI company, to develop a new AI agent. They also rolled out Cisco AI Defense, a tool meant to protect against threats tied to the misuse of artificial intelligence. These aren’t headline-chasing moves — they’re part of a broader strategy to shift Cisco’s offerings toward more intelligent, scalable, and secure tech solutions.
It’s a smart pivot, especially as enterprise customers start looking for integrated, AI-enabled infrastructure. Cisco’s bets here seem calculated and well-timed, and they’re helping shape the company’s future product roadmap.
Looking Ahead With Optimism
Cisco raised its full-year revenue guidance to a range of $56 to $56.5 billion. That’s up from a previous range that topped out at $56.3 billion. The earnings outlook was bumped up too, with projected EPS now between $2.40 and $2.52. These upward revisions show that management isn’t just confident — they see real strength in the pipeline.
There’s also been a fresh injection of support for the stock. Cisco announced a $15 billion expansion to its share buyback program. That’s a big vote of confidence in the company’s value and a direct way to return capital to shareholders. CFO Scott Herren pointed out that demand is strong and recurring revenue continues to climb, which adds more predictability to future performance.
Another subtle but important note: the company factored in the possible impact of new tariffs from Mexico, Canada, and China in its margin guidance. That tells us Cisco’s not just chasing growth — it’s thinking ahead, planning carefully, and staying nimble in the face of global challenges.
All in all, this was a quarter that balanced solid execution with forward-thinking strategy. Cisco’s not just trying to hold its ground — it’s actively evolving, and doing so while keeping its financials in check. For investors watching where the company goes next, this report offered plenty to feel good about.
Chart Analysis
Price Action and Moving Averages
CSCO has had quite a run over the past year. From the chart, we can see the stock gained steady momentum starting in late summer, pushing above both the 50-day (red line) and 200-day (blue line) moving averages. That uptrend held strong until mid-March, when things started to reverse. Recently, there’s been a sharp breakdown below the 50-day moving average, and the price is now sitting almost directly on top of the 200-day. This kind of move typically signals a shift in momentum and often becomes a moment of decision — either support holds here, or we see continued pressure.
The stock had reached a high near $66 before pulling back sharply in April, with a steep drop that pierced both moving averages in a matter of days. That type of breakdown tends to shake confidence in the short term, but how the stock behaves around the 200-day average will be important. A strong rebound from here could reset the trend. If it fails, lower levels might be tested again.
Volume and Relative Strength Index (RSI)
Volume has noticeably spiked during the recent drop, which often indicates institutional selling or a broader re-evaluation of the stock’s near-term potential. That said, it can also be a sign of capitulation — where weak hands exit and stronger hands start stepping in.
Looking at the RSI at the bottom of the chart, the reading has dipped into oversold territory below 30 several times in recent weeks. That suggests selling pressure has likely reached an extreme and could be due for a bounce. Historically, when RSI hovers at these levels, it tends to mark points of exhaustion — not always an immediate reversal, but often the beginning of a bottoming process.
General Takeaway
Over the past twelve months, CSCO showed strong upward momentum, supported by consistent demand and a steady climb in both short- and long-term moving averages. The recent dip, though sharp, may represent a cooling-off phase after an extended rally. The current price zone, resting near the 200-day moving average with an oversold RSI, will be important to watch. If support holds, it could serve as a foundation for a new base. If it doesn’t, patience may be needed before a clearer recovery trend emerges.
Management Team
Cisco’s leadership is guided by CEO Chuck Robbins, who has held the role since 2015. During his tenure, the company has undergone a significant transformation, shifting its focus from hardware to a broader mix that includes software, services, and recurring revenue streams. Robbins has been intentional about positioning Cisco to stay relevant in a changing tech environment, particularly through acquisitions and strategic bets on growth areas like AI and cybersecurity.
Supporting him is a team of long-standing executives with a deep understanding of both the business and the broader industry. CFO Scott Herren plays a key role in capital strategy and operational discipline. Liz Centoni, Cisco’s Chief Customer Experience Officer, brings versatility from her experience across different business units. Jeetu Patel, who oversees the product organization, is helping push Cisco into new tech frontiers, particularly in AI and cloud-based solutions. Together, this group blends experience with innovation, and that combination continues to guide the company through a time of fast-paced change.
Valuation and Stock Performance
Cisco is currently valued at about $221.83 billion, placing it comfortably in the large-cap category. The trailing price-to-earnings ratio sits at 24.46, while the forward P/E is a lower 14.12, reflecting expectations of stronger earnings growth in the coming quarters. From a valuation standpoint, the company looks reasonably priced given its balance of income generation and moderate growth prospects.
The stock has risen roughly 15.83% over the past year. That move came as the broader tech sector regained momentum, but Cisco’s climb has been more about consistent results and investor confidence in its evolving business model. It’s not the kind of stock that typically swings wildly — and that steadiness has been a trait investors tend to value.
Cisco has been active in rewarding shareholders. It recently expanded its stock repurchase program by $15 billion and raised its dividend to $0.41 per share, a modest but steady increase. That dividend growth, paired with the company’s buyback activity, reflects a business generating more cash than it needs to operate — and choosing to return much of it to shareholders.
Risks and Considerations
Cisco’s biggest challenge remains keeping pace in a highly competitive, fast-evolving industry. The company has made strong moves into areas like cybersecurity and AI, but it’s going up against aggressive players with deep pockets. Remaining competitive means constantly innovating — and that can require both capital and flexibility.
Another issue to watch is the global supply chain. While not as strained as it was during the peak of pandemic disruptions, component availability — particularly in semiconductors — can still create bottlenecks. Any hiccup in production or delivery could impact earnings, especially if paired with increased costs.
There’s also geopolitical risk. Cisco operates across numerous international markets, and its exposure to regulatory and compliance issues in various jurisdictions introduces complexity. Whether it’s tariffs, trade policy, or local competition, these global dynamics can have ripple effects on financial performance.
Finally, cybersecurity is both a core business and a potential vulnerability. Cisco is expected to lead in this space, so any weakness in its own technology — whether through product flaws or an external breach — could pose reputational risks and undermine customer trust.
Final Thoughts
Cisco stands out as a company that’s embracing the future without losing sight of its foundation. Leadership has shown a steady hand, balancing innovation with consistency. The stock’s performance reflects that balanced approach, and its shareholder-focused capital strategy adds to its appeal.
While the path forward won’t be without bumps, Cisco is managing its risks with a long-term view. With experienced leadership, solid cash flow, and a willingness to adapt, the company remains a relevant and resilient name in a tech space that’s constantly evolving.