The firms aren't necessarily in the dividend-yield vanguard, but they are expected to make big increases, led by Vulcan Materials (VMC -2.9%) -- for which Markit is forecasting a 25% hike.
A 15% increase of the dividend at Cisco Systems (CSCO +0.2%), meanwhile, would give it the highest yield of the companies Markit discusses, at 3.9%. "We expect Cisco Systems to increase its quarterly dividend by 15% to $0.30 in its next announcement," Markit says. "The company has grown the dividend by an average of 15% resulting in an average payout ratio of 37% in the last three years."
Other double-digit increases are expected at TJX (TJX -0.2%), which it expects will go up by 16% to $0.30; Home Depot (HD -0.3%), for which Markit's forecasting a near-14% increase to $0.79; and Comcast (CMCSA +0.2%), which it expects will raise to $0.31.
The company raised its dividend 24% in February, to $0.26/quarter; forward yield now is 3.28% -- still higher than Intel's (2.77%), Microsoft's (2.7%) and Apple's (1.99%).
Cisco's expected to keep generating free cash flow, and much of its cash on hand is overseas (only $6B held domestically). Moody's analyst Richard Lane expects the company will generate about $7B in free cash flow each year and "management will retain significant liquidity and financial flexibility."
And the company's move up the stack -- toward more software and services -- should keep pushing profit margin expansion, along with the company's job cuts.
Cisco (NASDAQ:CSCO) has used its FQ2 report to announce it's adding $15B to its buyback program, raising its available funds to $16.9B. That's good for repurchasing over 13% of shares at current levels.
The company has also hiked its quarterly dividend by $0.05/share (24%) to $0.26/share. That's good for a 4.6% forward yield. The next dividend is payable on April 27 to shareholders on record as of the April 6 close.
Product revenue rose 2% Y/Y in FQ2 to $9B, and services revenue 3% to $2.9B. Excluding the set-top business, Americas and EMEA revenue rose 1%, and Asia-Pac (under pressure in past quarters due to Chinese weakness) rose 11%.
Lifting EPS: GAAP operating expenses fell 7% Y/Y to $4.1B. $1.3B was spent on buybacks in FQ2. Cisco ended FQ2 with $60.4B in cash (just $3.9B in the U.S.) and $24.6B in debt.
Update (6:31PM ET): Cisco stated on its earnings call product orders rose 2% Y/Y in FQ2, a slight slowdown from FQ1's 3%. Enterprise orders -2%, Commercial (SMBs) +4%, Service Provider +5%, Public Sector flat. Asia-Pac orders rose 17%, while Americas orders were flat and EMEA down 1%. Cisco is now up 7.3% after hours.
Cisco (NASDAQ:CSCO) uses its FQ2 report to state it's upping its quarterly dividend by $0.02 to $0.21/share; that's good for a 3.1% yield at current levels. The next dividend will be paid on April 22 to shareholders on record as of the April 2 close.
With the help of favorable comps - sales declined sharply a year ago - product revenue rose 8% Y/Y in FQ2 to $9.08B, a marked improvement from FQ1's flat growth and driving the revenue beat. Services revenue rose 5% to $2.86B.
Gross margin was 61.7%, down from 63.3% in FQ1 but up from 61.3% a year ago, and in-line with guidance of 61%-62%. GAAP operating expenses rose 4% to $4.47B; R&D totaled $1.53B, sales/marketing $2.31B, and G&A $490M.
$1.2B was spent on buybacks, up from FQ1's $1B. CC at 4:30PM ET, guidance should be provided.
Cisco (CSCO) uses its FQ2 report to announce a $0.02/share increase in its quarterly dividend to $0.19/share. Shares now sport a 3.3% yield.
Cisco, which added $15B to its buyback three months ago, also says it bought back $4B worth of shares (over 3% of outstanding shares) in FQ2 at an average price of $21.73. $2B was spent on buybacks in FQ1, and $1.2B in FQ4.
Product revenue (drives future services revenue) fell 11% Y/Y to $8.4B Services revenue rose 3% to $2.7B and contributed to the revenue beat.
Gross margin was 61.3%, -100 bps but in-line with guidance of 61%-62%. Job cuts led opex to fall 6% Y/Y to $4.28B.
CSCO -0.4% AH. CC at 4:30PM ET, guidance should be provided.