If you are looking to make the most of an investment, you should consider stocks that have promising businesses, aren't overpriced, and that pay a decent yield. While that makes for a list of lofty requirements, being picky when it comes to which stocks you put in your portfolio can pay off handsomely and help you outperform the market.

Two stocks that tick off all those boxes today are Amgen (AMGN 0.07%) and Cisco Systems (CSCO 0.10%). Here's a look at why investing in these companies can set you up for some great returns down the road.

A couple counting money.

Image source: Getty Images.

1. Amgen

There's a lot to like about Amgen. The drugmaker has more than doubled its dividend payments from the $0.79 that it was paying back in 2015 to quarterly payout of $1.76 today. Its current yield of 2.8% is well above the S&P 500 average of 1.4% and can be an excellent source of cash flow for investors. Amgen currently maintains a 54% payout ratio, so there is plenty of room for the business to continue increasing its payments to shareholders.

The company is coming off a tough first quarter in which sales of $5.9 billion for the period ending March 31 declined by 4.2% from last year. Amgen blames the disappointing numbers on COVID-19, but the company sees some light at the end of the tunnel as vaccination rates climb higher. Despite its broader struggles, multiple drugs generated double-digit growth during the period, including Repatha (for high cholesterol) and Prolia (for bone loss). Although the company still anticipates some disruption during the second quarter, it sees that lessening in the latter half of the year as patient visits and diagnoses slowly return to pre-pandemic levels. In total, the company's profit of $1.6 billion in the first quarter was down 9.8% year over year when it released the results on April 27.

With shares of the healthcare stock up just 7% over the past year and vastly underperforming the S&P 500 and its 41% gains during that time, now may be a great time to load up on shares of Amgen. Trading at a forward price-to-earnings (P/E) ratio of less than 15, the stock isn't terribly expensive; investors are paying more than 23 times future earnings for both Eli Lilly and Abbott Laboratories

2. Cisco

Tech company Cisco pays investors a similar dividend yield of around 2.8%. And while its payouts haven't risen nearly as impressively as Amgen's have, with quarterly payments of $0.37, its shareholders are earning 76% more than they were in 2016 when Cisco was paying just $0.21 each quarter. Its payout ratio of 60% is slightly higher, but it's still low enough that investors don't need to lose sleep over its ability to reward shareholders.

The company released its third-quarter results on May 19, posting sales of $12.8 billion, which grew 6.8% year over year. It anticipates that in the fourth quarter, its growth rate will remain the same, expecting between 6% and 8%. Cisco also says demand is the strongest it has been in almost a decade. I'm optimistic that things will only get stronger, because as people continue to work remotely, there will be an incentive for businesses to upgrade their existing IT infrastructure. According to cybersecurity company Group-IB, ransomware attacks were up 150% in 2020. The extortion amounts grew in size and companies were down for an average of 18 days. The Colonial Pipeline breach is only the most recent popular example, which had devastating effects as it led to fuel shortages in parts of the country.

Cisco has also underperformed the markets the past year, rising by just 19%. Its forward P/E of 16 is lower than Oracle's multiple of 18 and is well below industry giant Microsoft, which is trading at 32 times its future earnings. Like Amgen, Cisco offers investors some promising growth opportunities, a decent valuation, and an above-average yield, making it a solid income stock to add to your portfolio today.