Top 10 Dow Dividend Stocks for January

These Dow dividend stocks are leading the way this month

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Dow Dividend Stocks #9: Cisco (CSCO)

Cisco185new Top 10 Dow Dividend Stocks for JanuaryDividend Yield: 3.1%
YTD Performance: 
52-Week Return: +5%

Cisco Systems (CSCO) has trickled down the ranks among our top Dow dividend stocks, as it now carries a yield of just slightly more than 3%.

CSCO performed fairly well in 2013, gaining about 12% on the year, but has been virtually flat since the start of January. The stock enjoyed a brief run-up mid-month after Barron’s claimed the shares could see a 20% return over the course of 2014, only to be sold off back down to the low $22 level.

The stock underperformed the rest of the tech sector during the bull market of 2013, and is still relatively cheap — with a forward P/E ratio of just 10.5 — compared to competitors Intel (INTC) and Microsoft (MSFT).

CSCO stock is undervalued, which may be reason enough to initiate a position, but on top of that, a trailing payout ratio of 36% indicates that there is still plenty of room for the company to increase its distribution in the future.

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