Cisco Systems, Inc. (NASDAQ:CSCO) is one of the Best Stocks to Buy for Dividends.
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The company’s business remains on solid footing. In March, it introduced its Webex AI agent designed for customer service applications, marking progress in its innovation efforts.
Cisco Systems, Inc. (NASDAQ:CSCO) is also effectively managing expenses, with operating costs in fiscal Q3 of 2025 remaining flat compared to the previous year. A slight improvement in gross margin led to a healthy rise in operating income. While the company still generates much of its revenue from established areas like routing and switching, these segments provide a steady cash flow that supports its ongoing business transformation.
Cisco Systems, Inc. (NASDAQ:CSCO) continues to return significant capital to shareholders, backed by strong free cash flow. The stock offers a 2.4% dividend yield and benefits from a newly approved $15 billion share buyback program. In the most recent quarter, the company generated $4.1 billion in operating cash flow, up 2% from the same period last year, and returned $3.1 billion to shareholders through dividends and repurchases.
Cisco Systems, Inc. (NASDAQ:CSCO)’s acquisition strategy also supports its dividend outlook, especially when deals boost cash flow. A notable example is the company’s 2024 acquisition of Splunk, which added about $1.4 billion to fiscal 2024 revenue. It currently offers a quarterly dividend of $0.41 per share.
While we acknowledge the potential of CSCO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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