Cisco: A High-Dividend Stock That's Undervalued

After getting bashed in the second quarter, shares of Cisco Systems (CSCO) have done well this summer, gaining over 17% since the June lows. CSCO has also been one of the top four Dow 30 performers over the past trading month, gaining 6.90% and trailing only Home Depot (HD), Caterpillar (CAT), and IBM (IBM), which leads the Dow pack with a gain of 8.49%. Even with its big summer gains, CSCO still trails the market year to date.

After having joined the universe of dividend stocks in 2011, CSCO is now approaching the arena of high-dividend tech stocks. CSCO just ratcheted up its quarterly dividends big time by announcing a huge 75% increase, going to $0.14, from $0.08. This is the second increase in 2012 -- CSCO increased its dividend in the first quarter to $0.08 from its initial $0.06 payout. This new higher-dividend payout ups CSCO's dividend yield significantly to just below 3.00%, which is in the higher range for most tech stocks.

Source: Seeking Alpha

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