Tech Dividend Stocks to Buy: Cisco (CSCO)
Dividend Yield: 3.5%
Plenty of tech stocks have done well in the past year. Cisco (CSCO) isn’t one of them. CSCO stock has gained only 6% in the past 52 weeks to wildly underperform the market, and it’s off about 2% to start 2014.
The reason: Cisco has released several disappointing earnings reports during this time. And the blame can be spread around — CSCO has had issues with emerging-market growth (or lack there of), reverberations from the NSA scandal, and the company itself fumbled the ball in its dealings with competitors like Huawei, Hewlett-Packard (HPQ) and Juniper Networks (JNPR).
However, much of this appears baked into CSCO stock, which is trading at just 10 times next year’s earnings. Moreover, it’s increasingly likely that even a slight improvement in the business could lead to an outsized relief rally in CSCO stock. And there’s plenty of potential for that — CSCO has been getting lots of traction in its security business, cloud efforts and mobile networking. Plus, it should get traction from its next-gen routers and switches.
Meanwhile, Cisco offers an attractive dividend that it has grown rapidly, from 6 cents per share in 2011 to 19 cents quarterly … good for a current yield of roughly 3.5%.
Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.