Cisco Systems, Inc. (NASDAQ:CSCO) is engaged in the manufacturing, selling and designing of Internet Protocol-based networking offering, and providing services related with these products and their applications. It has been paying an increasing dividend for six years, and hence has become an attractive investment partner for a dividend increase investor. At its current stock price of close to $30, it is an attractive investment option.
Many analysts use some checklist to assess whether a company will mark a good partner to assist investors build a portfolio with a payout stream that increases faster than inflation. Network and telecom equipment is a rapidly evolving market, and therefore it is vital for Cisco to have an innovation plan that has a strong prospect of keeping and expanding its market share.
The company does have a multi-faceted program in place to innovate its hardware as well as software. From its leadership perspective, it has the resources to innovate with in-house measures and to acquire know-how advanced by others.
Cisco is expected to post strong revenues and growing profits in the coming period. However, it remains to note that share repurchases are reducing the due share count. For a tech type firm, analysts intend to see note that the companies are beyond the level where they will give away profits to expand market share. They are instead on a path to increase their earnings while generating profit. The information that Cisco is providing on operating margins and gross reveals that it is concerned with registering a profit on its revenues and is not attempting to increase revenues at any cost.
On the debt front, Cisco has a credit score from Moody’s of A1 with a strong outlook. So, it displays investment-grade credit ratings. As total liabilities are almost half of the value of total assets, analysts don’t consider debt as a major factor in its performance. Cisco can pay its short-term debt using its cash on hand.