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Cisco Systems, Inc. (CSCO)

Company Dividend Discount ModelIndustry: Communication EquipmentSector: Technology

Valuation Snapshot

Stable Growth$21.25 - $31.60$26.18
Multi-Stage$33.07 - $36.20$34.60
Blended Fair Value$30.39
Current Price$70.63
Upside-56.97%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS1.36%4.65%1.611.601.581.561.541.501.501.491.381.19
YoY Growth--0.83%1.30%1.25%0.99%2.44%0.62%0.18%8.29%16.02%16.25%
Dividend Yield--2.28%2.86%3.06%3.41%2.75%3.88%3.19%3.37%4.00%3.88%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)10,329.00
(-) Cash Dividends Paid (M)6,462.00
(=) Cash Retained (M)3,867.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)2,065.801,291.13774.68
Cash Retained (M)3,867.003,867.003,867.00
(-) Cash Required (M)-2,065.80-1,291.13-774.68
(=) Excess Retained (M)1,801.202,575.883,092.33
(/) Shares Outstanding (M)3,998.503,998.503,998.50
(=) Excess Retained per Share0.450.640.77
LTM Dividend per Share1.621.621.62
(+) Excess Retained per Share0.450.640.77
(=) Adjusted Dividend2.072.262.39
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-0.57%0.43%1.43%
Fair Value$21.25$26.18$31.60
Upside / Downside-69.91%-62.93%-55.26%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)10,329.0010,373.2810,417.7610,462.4210,507.2810,552.3210,868.89
Payout Ratio62.56%68.05%73.54%79.02%84.51%90.00%92.50%
Projected Dividends (M)6,462.007,058.957,660.918,267.908,879.959,497.0910,053.73

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-0.57%0.43%1.43%
Year 1 PV (M)6,405.866,470.296,534.71
Year 2 PV (M)6,308.916,436.456,565.27
Year 3 PV (M)6,178.836,367.146,559.24
Year 4 PV (M)6,022.256,268.206,521.62
Year 5 PV (M)5,844.896,144.786,456.87
PV of Terminal Value (M)101,467.12106,673.30112,091.02
Equity Value (M)132,227.87138,360.17144,728.73
Shares Outstanding (M)3,998.503,998.503,998.50
Fair Value$33.07$34.60$36.20
Upside / Downside-53.18%-51.01%-48.75%

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