Why Cisco Is Poised to Outperform

Market-trouncing returns could be written in this 5-Star.

Brian D. Pacampara, CFA
Brian D. Pacampara, CFA
Jan 18, 2013 at 8:00PM
Technology and Telecom

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, networking giant Cisco Systems (NASDAQ:CSCO) has earned a coveted four-star ranking.

With that in mind, let's take a closer look at Cisco and see what CAPS investors are saying about the stock right now.

Cisco facts

Headquarters (founded)

San Jose, Calif. (1984)

Market Cap

 $111.5 billion

Industry

Communications equipment

Trailing-12-Month Revenue

$46.7 billion

Management

Chairman/CEO John Chambers

President/COO Gary Moore

Return on Equity (average, past 3 years)

16.4%

Cash/Debt

$45.0 billion / $16.3 billion

Dividend Yield

 

Competitors

Alcatel-Lucent

Hewlett-Packard

Juniper Networks

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 95% of the 11,020 members who have rated Cisco believe the stock will outperform the S&P 500 going forward.

Earlier this week, one of those Fools, EVplusEV, tapped the stock as a particularly solid bargain opportunity:

[Cisco] is cheap at 9x forward estimates vs. its five-year average of nearly 13x. Very strong balance sheet. The company has been cutting costs for years and finally seems poised for growth. Attractive dividend and even appears on the [Magic Formula] screen.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.