What to do when you've got oodles of cash, but nothing you do with it makes your shareholder's happy? That's been the story of Cisco Systems (NASDAQ:CSCO, news, filings) over the last year or two, as they have been taking the tens of billions of dollars on their balance sheet and buying everything that isn't nailed down, but not making anybody happy as growth has disappointed. The solution? To bring an end to an era, knuckle under, and declare a dividend.
That's right, Cisco is returning cash to its shareholders in its first ever dividend of $0.06/share - or about 1.4%. Of course, Cisco did say this was coming during their February earnings call, but it's still something else to actually turn the corner, or should I say, officially crest over that hill. The one that says you're now part of the old guard that generates cash better than it grows. Cisco's finally all grown up.
The dividend will be paid on April 20 to shareholders of record on March 31, and will drain their coffers to the total of somewhere around $330M I think. Not even a dent in the $35B+ they're sitting on. Apparently the market likes the move, the company's stock is up in the pre-market.
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