Cisco to pay its first dividend
- 15 September, 2010 06:24
- Comments 1
Cisco plans to pay a dividend to shareholders for the first time in its history.
The rate of the dividend will depend on U.S. taxation of overseas profits. CEO John Chambers told Wall Street analysts Tuesday.
See also: Cisco bolsters Nexus, Catalyst switch lines
Cisco will begin paying the dividend in its current 2011 fiscal year, Chamber said. It will yield 1 per cent to 2 per cent of a shareholder's value in the company, depending on how the U.S. government acts on taxation of overseas profits brought back into the country by American companies.
"We're paying a dividend this year," Chambers told the analysts during Cisco's annual analyst conference in San Jose. "The majority of our shareholders said we should do it."
"It would be a major mistake by this country not to allow repatriation" of profits made overseas, he added. "I think there's a 50:50 chance they'll allow it to happen. It would be an opportunity I'd be surprised our leaders let pass by. We have $US30 billion overseas."
Chambers said the repatriation decision will determine that rate of yield on Cisco's dividend.
"Size and timing of the dividend will be determined in the coming months, taking into consideration tax policy and broader market conditions," Cisco said in a statement.
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Comments
Share the wealth
1
It's about time all the tech companies that trade on Nasdaq shared their wealth to their share holders through dividends. They are no longer high growth stocks.
Dell for example has kept billions of dollars in its coffers, and not shared any of their profits with their share holders. Dell's stock price used to be US$55 and now it is $US12.50. There is no value in owning Dell shares, and yet they continue to make significant profits - some years as high as $2 billion per annum. And what does Dell do with this profit - the answer is not much. They bought Perot Systems to increase Services penetration (doubt that will work), Equalogics as a low end storage offerring, and missed out on 3PAR to HP.
Give me Aussie shares any day, as these US tech stocks are passed their use by date. Aussie companies pay franked dividends and share their profitability with their share holders.