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Cisco Systems, Inc. (CSCO)

Company Dividend Discount ModelIndustry: Communication EquipmentSector: Technology

Valuation Snapshot

Stable Growth$21.29 - $31.68$26.24
Multi-Stage$33.17 - $36.31$34.71
Blended Fair Value$30.47
Current Price$70.63
Upside-56.85%
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 Rate9.08%9.08%9.08%
Growth Rate-0.57%0.43%1.43%
Fair Value$21.29$26.24$31.68
Upside / Downside-69.86%-62.85%-55.15%

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 Rate9.08%9.08%9.08%
Growth Rate-0.57%0.43%1.43%
Year 1 PV (M)6,406.926,471.366,535.79
Year 2 PV (M)6,311.006,438.586,567.44
Year 3 PV (M)6,181.896,370.306,562.49
Year 4 PV (M)6,026.236,272.346,525.92
Year 5 PV (M)5,849.716,149.866,462.20
PV of Terminal Value (M)101,851.51107,077.41112,515.65
Equity Value (M)132,627.25138,779.84145,169.49
Shares Outstanding (M)3,998.503,998.503,998.50
Fair Value$33.17$34.71$36.31
Upside / Downside-53.04%-50.86%-48.60%

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