Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, networking giant Cisco Systems
With that in mind, let's take a closer look at Cisco's business and see what CAPS investors are saying about the stock right now.
Cisco facts
| Headquarters (Founded) | San Jose, Calif. (1984) |
| Market Cap | $96 billion |
| Industry | Communications equipment |
| Revenue | $42.36 billion |
| Management | Chairman/CEO John Chambers CFO Frank Calderoni |
| Return on Equity (Average, Past 3 Years) | 18.1% |
| Cash/Debt | $40.23 billion / $15.24 billion |
| Dividend Yield | 1.4% |
| Competitors |
Alcatel-Lucent Hewlett-Packard Juniper Networks |
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 95% of the 10,700 members who have rated Cisco believe the stock will outperform the S&P 500 going forward. These bulls include Sparticus501 and marshgerda.
Just last month, Sparticus501 tapped Cisco as a particularly timely opportunity: "Even though this company took a hit in recent months, it still dominates the router and switch market and will in the future. Right now the stock is cheap."
Cisco even boasts a robust three-year average operating margin of 21.8%. That's higher than that of main rivals Alcatel-Lucent (0.7%), Hewlett-Packard (9.9%), and Juniper (18.1%).
CAPS member marshgerda elaborates on the bargain opportunity:
Unlike many, I do not mind these "out-of-favor" old "new economy" stocks. They will never re-live the go-go days of the late nineties, but nor will they plunge like they did in early 2000s. Cisco is $10 below their 52 week high. They seem to have formed a bottom. Their size gives them a moat. I like the start of a dividend.
Of course what I like the most is the price and the balance sheet. They have about 40 billion (with a b) of cash. ... So they have dry powder to buy companies that can add to their income stream. Backing out the excess cash, I calculate a 12% earnings yield, which is extremely solid.
I will have no trouble sleeping at night holding CSCO.
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