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Cisco (CSCO) shareholder Ralph Nader continues to be frustrated with the networking giant's...

Cisco (CSCO) shareholder Ralph Nader continues to be frustrated with the networking giant's failure to boost its quarterly dividend above a current, paltry $0.06/share (1.2% annual yield). Cisco's massive spending on stock buybacks hasn't kept its shares from languishing, Nader asserts, and a future dividend hike shouldn't be dependent on an offshore tax holiday that's unlikely to materialize. (previously)
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Comments (5)
  • phxcrane
    , contributor
    Comments (520) | Send Message
     
    Hey Ralph! If you read this do a brother a favor and run for president. Thanks in advance
    30 Jan 2012, 07:06 PM Reply Like
  • avickrey
    , contributor
    Comments (38) | Send Message
     
    Ha is that THE Ralph Nader?

     

    My advice to Ralph, you should have lowered your cost basis when CSCO was in the 15's.

     

    I've been very happy with CSCO management considering that I was bottom fishing about 6 months ago. CSCO only started paying a div recently. Patience, grasshopper.
    30 Jan 2012, 07:23 PM Reply Like
  • Pey Shadzi
    , contributor
    Comments (550) | Send Message
     
    Ralph, I love you, man -- I even donated to your campaign and voted for you in the past two elections -- but you gotta stop bagging on CSCO. Why not just sell and purchase shares of NLY if you want the dividend so badly?
    30 Jan 2012, 08:23 PM Reply Like
  • 1980XLS-2.0
    , contributor
    Comments (525) | Send Message
     
    Ralph should have invested in some classic Corvairs.They are bringing big bucks in collector car circles, such as Hemmings & Barrett-Jackson.

     

    But then again, Cisco never hurt anybody I guess.
    30 Jan 2012, 09:22 PM Reply Like
  • Keep It Simple
    , contributor
    Comments (489) | Send Message
     
    Nader - Stop trying to increase your income with a paltry dividend increase!

     

    Nader knows that Cisco currently trades "private industry" cheap. Look:

     

    a) 2011 Earnings = $6.5B
    b) Current Market Cap = $102B
    c) Cash on Hand = $45B
    d) Shares Outstanding = $5.4B

     

    e) Cash on Hand per Share = c / d = 45 / 5.4 = $8.33

     

    f) Business value without cash per share = (b - c) / d = (102 - 45) / 5.4 = 57 / 5.4 = $10.55

     

    g) Business without cash P/E = (b - c) / a = 57 / 6.5 = 8.76 P/E

     

    Most solid private businesses are purchased in the 6 - 8x earnings range. That would give Cisco a private value of around:

     

    (6 * a) + c = (6 * 6.5) + 45 = 39 + 45 = 84
    (8 * a) + c = (8 * 6.5) + 45 = 52 + 45 = 97

     

    $84-97B

     

    News flash - Cisco isn't private. Money Managers will eventually jump on this arbitrage.

     

    Note: My above calculations were very rough.

     

    When I sit down and do the actual work, I personally calculate true owner earnings:

     

    (reported earnings) + (depreciation, depletion, amortization, and certain other non-cash charges) - (the 10-year average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume)

     

    Then I'll run the number again using a 5-year average annual amount of capex.
    31 Jan 2012, 11:34 AM Reply Like
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