Cisco Systems Enjoys Upside Price Momentum

Every New York stock exchange trading day I'm posting a daily dividend stock or fund review. I'll share the three chief qualities of just one equity or fund that could be selected for a dividend stock portfolio I've named the Safari to Sweet Success.

This week the portfolio I'm building (my Safari To Sweet Success portfolio) seeks a high-yield and growing stock in the technology sector. 

The technology sector includes nineteen industries ranging from communication equipment, computers, consumer electronics, and contract manufacturing, to health and information technology and services to internet, scientific instruments, software, solar and all such technological enterprises.

Today I'm reviewing a Large-Cap Silicon Valley-based communication equipment firm that supplies data networking equipment and software worldwide. The company's name is Cisco Systems, Inc. Its trading ticker symbol is CSCO. 

Back on April 19, I did another report on CISCO.

CSCO products include routers, switches, access equipment, and security and network management software which allow data communication among dispersed computer networks.

It serves businesses of various sizes, public institutions, governments, and service providers. The company sells its products directly, as well as through channel partners, such as systems integrators, service providers, other resellers, and distributors. 

The company was founded in 1984 and is headquartered in San Jose, California.

I use three key data points gauge the value of any dividend equity or fund like Cisco Systems, Inc (CSCO): 

(1) Price

(2) Dividends

(3) Returns

After those three, four more keys will finally unlock an equity or fund in which to invest. 

No matter what, it's the first three primary traits that best tell whether a company has made, is making, and will make money. 

CSCO Price

 Cisco 's price was $45.70 per share at yesterday's market close. A year ago its price was $34.30 for a gain of $11.40 per share in the past year.  

Assuming Cisco's price will continue to trade in the range of $40.00 to $60.00 next year, its price could grow another $11.40 from $45.70 to $57.10 by mid- May 2019. 

CSCO Dividends

United Microelectronics's most recently declared quarterly dividend was $0.33 per share declared in February and paid in April. That $0.33 Q dividend equates to an annual payout of $1.32for 2018 and yields 2.89% at yesterday's $45.70 stock price.

Gains For CSCO?

The $11.40 estimated year over year price gain plus an anticipated dividend of$1.32 makes a projected gross annual gain of $12.72 per share, which will be reduced by the costs to trade these shares.  

$1,000.00 invested today at the $45.70 price buys 22 shares. 

A $10 broker fee paid half at purchase and half at sale subtracts about $0.45 per share. Taking that $0.45 brokerage cost out of the estimated $12.72 gross gain per share leaves a net gain of $12.27 X 22 shares = $296.94 or a 29% potential net gain on a $1,005.40 investment.

Therefore, Cisco Systems, Inc. (whose ticker symbol is CSCO), now shows a possible 29% net gain including a 2.89% dividend yield. 

Thirty-three analysts cover this stock. Fourteen say buy; eight say the stock will outperform the market, ten say hold the stock, and the thirty-third says underperform. Their consensus rating adds up to 1.94 or outperform. 

Y Charts is "neutral" for CSCO for an overall "Y" rating and shows "Average" for a Value score of 4 out of ten points. YCharts does rank it strong with a 9 out of 10 possible Fundamental points and shows a historic valuation score as 51.89% overvalued. based on a $30.12 historic value.

You could look at all those numbers like this: Cisco Systems, Inc, (CSCO) has made money, is making money, and could net a 29% net gain next year including2.89% dividend yield. It could be more, it could be less.

Those forward-looking numbers were conjecture based on past year performance. Actual results remain to be seen. They could turn out to be far higher or lower. More study is required for you to determine if Cisco Systems, Inc. (CSCO) is worth your time and money.