Cisco

Methodology

Cisco's mature networking equipment business generates stable, predictable earnings with minimal growth, making fair value calculations straightforward but unremarkable. The shift toward software and subscriptions provides modest earnings tailwinds as hardware sales stagnate. Fair value works well when acknowledging low-single-digit earnings growth from recurring revenue transitions.

Methodology

Cisco trades at low PEG ratios (typically 0.5-1.2x) reflecting mature market positioning and concerns about competitive threats from cloud networking and SD-WAN disruption. The company's subscription transition supports valuation stability but growth remains constrained. PEG appears attractive but reflects legitimate concerns about long-term competitive positioning in software-defined networking.

Methodology

Cisco pays a substantial dividend yielding 2-3% plus aggressive share buybacks, making PEGY much more attractive than PEG for this mature tech company. Total shareholder yield often exceeds 5% annually through dividends and repurchases. The income component becomes critical given limited organic growth, positioning Cisco as a tech dividend stock.