Ten-Year Tally: CSCO Hands Back $141 Bil to Shareholders
In the last decade, Cisco Systems (CSCO) has returned an impressive $141 Bil back to its shareholders through cold, hard cash via dividends and buybacks. Let’s look at some numbers and compare how this payout power stacks up against the market’s biggest capital-return machines.
As it turns out, CSCO has returned the 12th highest amount to shareholders in history.
| CSCO | S&P Median | |
|---|---|---|
| Dividends | $59 Bil | $2.8 Bil |
| Share Repurchase | $82 Bil | $5.2 Bil |
| Total Returned | $141 Bil | $8.8 Bil |
| Total Returned as % of Current Market Cap | 53.1% | 26.0% |
Why should you care? Because dividends and share repurchases represent direct, tangible returns of capital to shareholders. They also signal management’s confidence in the company’s financial health and ability to generate sustainable cash flows. And there are more companies like that. Here is a list of the top 10 companies ranked by total capital returned to shareholders via dividends and stock repurchases.
Top 10 Companies By Total Shareholder Return
- Better Value & Growth: FFIV Leads Cisco Systems Stock
- Pay Less, Gain More: MSI, FFIV Top Cisco Systems Stock
- Cisco Systems Stock Jump Looks Great, But How Secure Is That Gain?
- Stronger Bet Than Cisco Systems Stock: MSI, FFIV Deliver More
- Cisco Systems Stock To $54?
- Stronger Bet Than Cisco Systems Stock: FFIV Delivers More
| Total Money Returned | As % Of Current Market Cap | via Dividends | via Share Repurchases | |
|---|---|---|---|---|
| AAPL | $835 Bil | 24.6% | $140 Bil | $695 Bil |
| MSFT | $364 Bil | 9.7% | $165 Bil | $199 Bil |
| GOOGL | $343 Bil | 14.2% | $12 Bil | $331 Bil |
| XOM | $207 Bil | 43.6% | $144 Bil | $63 Bil |
| WFC | $206 Bil | 80.2% | $59 Bil | $147 Bil |
| JPM | $168 Bil | 20.4% | $0.0 | $168 Bil |
| META | $167 Bil | 8.8% | $6.4 Bil | $160 Bil |
| ORCL | $163 Bil | 24.6% | $34 Bil | $129 Bil |
| JNJ | $157 Bil | 36.4% | $104 Bil | $52 Bil |
| CVX | $149 Bil | 55.8% | $97 Bil | $53 Bil |
For full ranking, visit Buybacks & Dividends Ranking
What do you notice here? The total capital returned to shareholders as a % of the current market cap appears inversely proportional to growth prospects for reinvestments. Companies like META and MSFT are growing much faster, in a more predictable way, compared to the others, but they have returned a much lower fraction of their market cap to shareholders.
That’s the flip side to high capital returns. Sure, they are attractive, but you have to ask yourself the question: Am I sacrificing growth and sound fundamentals? With that in mind, let’s look at some numbers for CSCO. (see Buy or Sell CSCO Stock for more details)
CSCO Fundamentals
- Revenue Growth: 0.5% LTM and 2.6% last 3-year average.
- Cash Generation: Nearly 23.0% free cash flow margin and 21.8% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in the last 3 years for CSCO was 0.5%.
- Valuation: CSCO trades at a P/E multiple of 27.2
- Opportunity vs S&P: Compared to S&P, you get higher valuation, lower revenue growth, and better margins
| CSCO | S&P Median | |
|---|---|---|
| Sector | Information Technology | – |
| Industry | Communications Equipment | – |
| PE Ratio | 27.2 | 23.8 |
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| LTM* Revenue Growth | 0.5% | 5.1% |
| 3Y Average Annual Revenue Growth | 2.6% | 5.2% |
| Min Annual Revenue Growth Last 3Y | 0.5% | -0.3% |
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| LTM* Operating Margin | 21.8% | 18.7% |
| 3Y Average Operating Margin | 24.9% | 17.8% |
| LTM* Free Cash Flow Margin | 23.0% | 13.0% |
*LTM: Last Twelve Months
That’s a good overview, but evaluating a stock from an investment perspective involves much more. That is exactly what Trefis High Quality Portfolio does. It is designed to reduce stock-specific risk while giving upside exposure.
CSCO Historical Risk
That said, Cisco isn’t immune to big drops. It plunged nearly 86% in the Dot-Com crash and took a 60% hit during the Global Financial Crisis. Even more recent shocks weren’t easy: the inflation surge knocked it down 37%, and the Covid selloff saw a 34% dip. The 2018 correction still carved out a 24% pullback. Good fundamentals help, but when the market turns, even steady names like Cisco can take a serious hit.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.