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5 Best Stocks for Continued Dividend Growth

Don't just chase yield — chase potential

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Cisco NASDAQ:CSCOCurrent Yield: 2.8%
Payout Ratio: 33%
Dividend Growth: 183% since 2011

Cisco (CSCO) has a short track record as a dividend payer, but the low payout ratio and healthy yield right now should qualify this technology stock for any income portfolio.

Since its first dividend paid in March 2011, Cisco has already nearly tripled its payout from 6 cents quarterly to 17 cents. That’s good for a respectable 2.8% yield — and a sustainable one, too. While there are short-term challenges to Cisco amid a weak enterprise spending environment, the company is very stable in the long-term with more than $51 billion in cash and investments and about $13 billion in annual operating cash flow … so don’t expect Cisco to go anywhere, and take comfort in that cash cushion to support existing and future dividends.

There admittedly are problems in enterprise tech broadly as businesses cut back and global economic uncertainty reigns. But the top and bottom lines are both marching higher quarter after quarter at CSCO, so this pick is stable in the long-term.

Jeff Reeves is the editor of and the author of The Frugal Investor’s Guide to Finding Great Stocks. Write him at or follow him on Twitter via @JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.

Article printed from InvestorPlace Media,

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