Cisco Systems (CSCO) on Tuesday promised shareholders that it will issue its first dividend within the next year. The size of the dividend, which Cisco plans to pay by the end of July 2011, will depend on federal tax policies, market conditions and other variables, the computer-networking-gear maker says.
In its blog statement, the company says it's committed "to further establishing Cisco as a unique investment by providing shareholders with a guaranteed dividend yield to complement Cisco's long-term growth opportunity." In other words, it hopes the dividend will make it more attractive to investors.
Cisco is one of several technology companies looking to use cash on hand to boost its stock price and reward its stockholders. Microsoft (MSFT) shares rose yesterday on reports that the company may take on further debt for either increased dividends or a stock buyback.
Cisco last month said its fiscal-fourth quarter earnings surged 79% to $1.9 billion after revenue increased 27% to $10.8 billion. As of July 31, the company had a cash balance of $4.58 billion.