Cisco Systems Stock Capital Return Hits $143 Bil
In the last decade, Cisco Systems (CSCO) stock has returned an impressive $143 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 stock has returned the 12th highest amount to shareholders in history.
| CSCO | S&P Median | |
|---|---|---|
| Dividends | $60 Bil | $4.5 Bil |
| Share Repurchase | $83 Bil | $5.5 Bil |
| Total Returned | $143 Bil | $9.1 Bil |
| Total Returned as % of Current Market Cap | 49.2% | 25.6% |
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 stocks like that. Here is a list of the top 10 companies ranked by total capital returned to shareholders via dividends and stock repurchases.
The asset allocation strategies of Trefis’ Boston-based, wealth management partner yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Our partner has incorporated the Trefis HQ Portfolio in this asset allocation framework to provide clients better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.
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Top 10 Stocks By Total Shareholder Return
| Total Money Returned | As % Of Current Market Cap | via Dividends | via Share Repurchases | |
|---|---|---|---|---|
| AAPL | $847 Bil | 21.0% | $141 Bil | $706 Bil |
| MSFT | $364 Bil | 9.5% | $165 Bil | $199 Bil |
| GOOGL | $343 Bil | 10.1% | $12 Bil | $331 Bil |
| XOM | $212 Bil | 42.8% | $145 Bil | $67 Bil |
| WFC | $208 Bil | 74.0% | $59 Bil | $150 Bil |
| JPM | $174 Bil | 20.1% | $0.0 | $174 Bil |
| META | $167 Bil | 10.2% | $6.4 Bil | $160 Bil |
| ORCL | $161 Bil | 21.6% | $34 Bil | $126 Bil |
| JNJ | $157 Bil | 34.4% | $104 Bil | $52 Bil |
| CVX | $153 Bil | 56.3% | $97 Bil | $55 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. Stocks like Meta (META) and Microsoft (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 Cisco Systems Stock for more details)
Cisco Systems Fundamentals
- Revenue Growth: 5.3% LTM and 3.4% last 3-year average.
- Cash Generation: Nearly 23.5% free cash flow margin and 22.1% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in the last 3 years for CSCO was -5.6%.
- Valuation: Cisco Systems stock trades at a P/E multiple of 28.4
| CSCO | S&P Median | |
|---|---|---|
| Sector | Information Technology | – |
| Industry | Communications Equipment | – |
| PE Ratio | 28.4 | 23.6 |
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| LTM* Revenue Growth | 5.3% | 5.4% |
| 3Y Average Annual Revenue Growth | 3.4% | 5.2% |
| Min Annual Revenue Growth Last 3Y | -5.6% | -0.1% |
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| LTM* Operating Margin | 22.1% | 18.7% |
| 3Y Average Operating Margin | 24.5% | 18.2% |
| LTM* Free Cash Flow Margin | 23.5% | 13.3% |
*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
Cisco isn’t immune to big drops. It lost about 86% in the Dot-Com crash and 60% during the Global Financial Crisis. Even more recent shocks hit hard — down 37% in the inflation surge, 34% during Covid, and nearly 25% in 2018’s correction. Strong company, sure, but history shows that in major sell-offs, even solid stocks like Cisco 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.