Bought 15 shares of Cisco Systems (CSCO) for 42,14$/share. Total cost – 541 EUR (642$) Annual post-tax dividend inome – 12,7 EUR. Yield on cost – 2,4%
Its been a while now since my last purchase as the market is back to its record highs, but there it was a buying opportunity. Cisco share has took a hit and decreased from 48$ to nearly 42$ today (-12,5%). Yes company lowered its future expectations, but I love Cisco metrix – 2019/2020 Annual sales was 49,3 bn$ and EBITDA 16,4 bn$ both down compared YoY. Net Income 11,2 bn$ or 2,64$ EPS. With purchase price of 42,14$ P/E – 16x, which show that stock is normal valued. Altough dividend yield – 2,4% is not the highest of them all but payout ratio – 55% it looks quite safe. Last dividend increase was done from 0,35$ to 0,36$ so only +3%. Low growth, however company had impressive share buyback lately leading to EPS growth even with total Net Income decline.
What I love the most is their extra strong balance sheet with cash 29 bn$ and financial debts only 15 bn$ company is strongly Cash positive (!) of nearly one year of EBITDA. Equity stands around 40%.
This purchase increased forward estimated dividend income to 816 EUR. After all the cuts, this is a small increase back to 1 kEUR mark. This purchase is dedicated to diversification as after divestment of INTC I had zero tech companies.