Now trading ex-dividend, shares of Cisco Systems, Inc. (NASDAQ:CSCO) have dipped over the most recent trading day, providing investors with an interesting entry point to one of the best dividend companies currently trading on the NASDAQ.
Most firms on the NASDAQ today with a similar growth profile to Cisco tend to have much lower dividend yields, with the focus primarily being on the growth profile these technology companies can provide investors over the long-run.
Cisco’s business model is one which is poised to continue to break out over the long-run with the rise of e-commerce businesses and the need for the unique product assortment Cisco offers its clients.
As one of the global leaders in providing integrated network solutions to clients, Cisco’s shares have traded in an interesting fashion over the years. Initially a tech boom darling company, shares of Cisco have continued to trade at depressed levels relative to the company’s long-term potential for some time.
From a fundamental valuation perspective, Cisco’s 17.6 price to earnings (P/E) ratio combined with a dividend yield close to 3.5% is unparalleled in its space.
The company’s hardware products, for which it is most well-known, now comprise a smaller percentage of the company’s overall business than in the past.
The company has continued to move toward its service offerings which include technical support and advanced network solutions, moving deeper and deeper into the realm previously occupied by one or two large companies - think International Business Machines Corp. (NYSE:IBM).