How to Buy Cisco Stock Now, Forecast and Dividend Guide
Cisco Systems is a well-established technology company, and its stock is a popular investment asset for institutional investors. The company operates in the technology sector, and Cisco stock price has moved sideways and in a trendy direction after the breakout. As a mature company, it has good financial health with a steady flow of income and strong cash flow.
The Cisco stock (CSCO) may be worth buying because its fundamentals are strong, and they are in line with the buy signals obtained through technical analysis. Moreover, several analysts and experts from reputable institutions forecast potential growth in Cisco stock price.
Cisco Stock Overview
The computer scientists Leonard Bosack and Sandra Lerner established Cisco Systems Inc. in 1984 in California, USA. The founders, who at the time worked at Stanford University, were looking for a way to connect the local area networks from their respective departments positioned at different on-campus locations. They created Cisco to solve this issue.
Cisco is a technology company that engages in the design, production and sale of products and services associated with networking, security, applications, collaboration and the cloud. It develops networking hardware and software and manufactures telecommunication equipment. The company also offers infrastructure platforms and designs. It also sells routers, switches, and servers to transfer and transport data through corporate networks.
Since it was launched, the company has become an essential player in the market for internet protocol-based networking gear. Cisco offers its products and services through its subsidiaries to its consumer and business clients. Its customer base comprises primarily of large companies, telecommunications service providers, and government agencies worldwide. Company headquarters are located in San Jose, California, USA, but Cisco also has regional headquarters in Netherlands and Singapore and offices in over 70 countries.
Cisco stock symbol is CSCO, and it is traded on the NASDAQ stock exchange. It is a constituent company in stock market indices like NASDAQ 100, US 50, S&P 500, S&P100, DJ Technology, and DJ Composite.
Cisco Stock History
Throughout its 30 plus years of history, Cisco stock survived the dot-com bubble, recorded multiple stock splits, and made many acquisitions.
Cisco Stock Evolution
Cisco Systems Inc. Initial Public Offering (IPO) was on 16 February, 1990. Its stock started trading on NASDAQ at $18 per share. Cisco stock history shows that the company performed nine splits until 2000. The first Cisco stock split took place in 1991, with a split ratio of 2 for 1. Later stock splits were executed at a ratio of 2 for 1 stock and 3 for 2 stocks. Meaning, if you had bought 100 shares in 1990, in 2000, you would have 28,800 stocks!
Cisco System stock history also shows that its price is affected by mergers and acquisitions, which are an integral part of its business strategy. To illustrate this, Financial Times estimated that two acquisitions completed in 2021 and two more announced in the same year had a positive effect on Cisco stock price of anywhere from 1.9% to around 5%.
Cisco stock has recorded substantial price rises or price declines as a result of its financial performance. The stock price decline might also be a direct consequence of an increase in production costs, and a shortage of crucial parts such as semiconductors.
Cisco Stock Price Chart
Cisco was one of the most valuable companies in the world until the dot-com bubble in March 2000. The company had a market capitalisation of nearly $579, making the company worth more than Microsoft. However, the company experienced a substantial decline in market capitalisation during the internet bubble.
The path to an All-Time-High (ATH) price started with the IPO day when the stock went through a 24% gain per share. It continued its upward trend for the better part of the decade. CSCO stock fluctuated to the level of $82, while closing at an ATH price of $80 in March 2000.
The company stock hit an All-Time-Low (ATL) value in November 2002 when it dipped to a closing price of $8. After hitting this ATL price, the stock fluctuated with a range of around $10 to nearly $35 per share until 2017, when it moved beyond the resistance level.
After the breakout, the Cisco stock moved in an overall upward trajectory, interrupted with significant price retracements. The stock plunged by more than 35% from 2019 until the last quarter of 2020. However, from November 2020 until the second half of 2021, the stock managed to bounce back by more than 70%, reaching a level of nearly $60.
Why Invest in Cisco Share Now? Points to Consider
Is Cisco stock a good buy? There is little hesitation that this is a stock worth buying. Multiple reasons can justify the investment grade of Cisco stock, such as:
- The company expects to see a positive financial performance in the future, which positively affect its overall health
- The company has a solid balance sheet with a high level of free cash flow
- The stock offers solid and stable dividend payments
- Anticipation of increase in the addressable market value for Cisco products and services
- Some experts estimate that the stock is trading well below its fair value
- Positive impact on stock price coming from the announced acquisitions
- Market participants perceive this stock as a solid defensive stock due to its ability to endure through economic downturns
- Mature tech stocks become more appealing for investors during economic turbulences
- Nearly 75% of the shareholders are mutual funds and institutional investors
Cisco Stock Dividend Information
CSCO has regularly paid a quarterly cash dividend since its first dividend payment of $0.06 per share in 2011. Cisco stock dividend has grown constantly, and in 2021, the quarterly dividend payment was $0.37 per share. The total dividend payout in 2011 was $0.18 per share, and the company increased its payment to $1.47 per share in 2021. Seeking Alpha estimates Cisco's 1-year dividend growth rate to be 2.85%, while the 5-year growth is 8.23%. The company recorded a 10-year dividend growth rate of 28%, outperforming the sector median of around 10.81%.
In 2011, the stock generated an annual dividend yield of 1.34%, and in 2020, the annual dividend yield was 3.29%. CSCO is often categorised as a dividend stock because it has a strong cash flow and healthy financial position that can support its dividend policy. Cisco dividend payout ratio is valued at around 58% of the generated profits. This is slightly above the recommended ratio, but market participants anticipate that this won’t jeopardise its dividend payments.
Cisco Stock Forecast and Prediction
Cisco stock forecast shows that analysis and experts anticipate bullish movements for CSCO.
20 Wall Street analysts expect that Cisco stock might reach a median target price of $63.8, which would be a decade high. Their optimistic forecast is a high price at the level of $74 and a pessimistic value of $55 per share.
The analysts' forecasts published by CNN Business give similar outlooks about the future Cisco stock value, with an anticipated high price of $74 and a low of $52 per share. The forecasted median target price is set at the level of $64 per share. The analyst recommendations based on 30 investment analysts published by CNN Business give a buy rating to Cisco Stock.
Analysing the past movements in Cisco stock price with the help of technical indicators gives similar results. Strong buy signals are detected by applying popular indicators like RSI, MACD, Highs/Lows and more. The Simple and Exponential Moving Averages indicators that reflect short-term and long-term movements also give Cisco stock price a "buy" or a "strong buy" signal.
The bullish forecasts for Cisco stock price also seemed confirmed by the positive for Cisco’s critical financial metrics. Indeed, it anticipates an increase of 5% in revenue levels, and a growth in its EPS (Earning Per Share) of more than 6%. The possible revenue growth might come from the forecasted increase in sales, revenue from acquisitions, and a significant rise in the overall market value for Cisco products and services. The company also anticipates growth in its subscription revenue to continue, at least during the next couple of years.
Where to Invest in Cisco Stock Now?
To invest in Cisco stock, traders need to open an account with a reliable and reputable broker. A reliable broker is a broker that offers its clients a stable trading platform, swift execution of trading orders, a wide variety of assets and a high level of safety and security.
ZFX satisfies these and more. It offers many benefits to its clients, and some of the most important ones that position ZFX as a superior broker compared to some other brokers are:
- User-friendly ZFX MT4 trading platform, adequate for newbie and experienced traders
- High level of educational materials
- Opportunity for traders to practice their trading by opening a demo account
- ZFX offers competitive fees, and it even removes some fees charged by other brokers;
- Broad choice of assets such as stock, indices, commodities and forex
- High leverage
- Different trading accounts;
- Low spread;
- Minimum trading capital as low as $50
How Can I Buy Cisco Stock Now?
Buying Cisco stock on ZFX only takes a few easy steps, starting with opening an account.
1. Register with ZFX
Registering an account on ZFX is as simple as it gets, and it requires that you first select the preferred option. The available options can be seen in the following image.
Traders can choose to open a live trading account or practice their trading skills by opening a demo account. Demo practising is a useful way for inexperienced traders to get familiar with the trading process. After selecting the desired option, the following window will appear.
To complete the registration, provide the requested information and hit the next button.
2. Account verification
The next step concerns the security of your account, and you need to go through the verification process. ZFX will ask you to provide a valid identity document: passport, national ID or driver's license. Simply scan the relevant page of your document. You also need to verify your bank account, by providing either a copy of your bank account or a page from your bank book.
3. Make your first deposit
After the two previous steps, you can now deposit funds on your live trading account. Log in to your account by hitting the "myZFX" button at the top right side of the ZFX website.
When you enter your dashboard, go to the "deposit" section and follow the steps to make your first deposit. Decide whether you will fund your account through bank transfer or credit card.
4. Buy Cisco stock
Buying and selling Cisco stock is performed on the user-friendly ZFX MT4 trading platform, and you can download a suitable version from the website.
Once you download the desired ZFX MT4 platform, you can now log in with the information provided on your registered email address.
When you open the MT4 platform, go to the account section on the left side and log in with your details. You can then find the Cisco stock and other assets offered by ZFX in the "Market Watch" section. When you select CSCO, a graph showing the Cisco stock quote appears, along with the stock order options. You can now invest in Cisco stock as you wish.
Bottom Line: Should I Buy Cisco Stock Now?
Cisco stock is still among the top tech companies in the USA based on the cash levels on its balance sheet. What’s more, the company is considered as undervalued, and experts believe that Cisco stock will appreciate based on the company’s fundamentals and anticipated financial performance. All things considered, Cisco stock could be a good buy now, because it has a bullish outlook and thus the potential to generate gains. When the forecasted median target price becomes a reality, it will reach a new decade high value.
Traders can benefit from movements in Cisco stock price when they invest in CSCO through ZFX, a reliable and regulated broker you can sign up to for free, in just a few simple steps.