Investing in Cisco Systems can yield $1,000 in annual dividends, but how much do you need to invest? Find out the required number of shares and total cost here.
Want some extra cash in your pocket each year, with low risks and no effort? If you’re looking to generate $1,000 in dividend income, investing in Cisco Systems (CSCO 0.04%) could be a solid option.
Crunching the numbers
To find out how much you need to invest, divide your target income by the yield. With a yield of 3.4%, you’ll earn $1000 a year from a $29,687.50 Cisco investment. At today’s price of $47.50 per share, this translates to 625 shares.
You can double-check my math by flipping the equation around to run the numbers backwards. Those 625 Cisco shares currently earn $0.40 per quarter, so let’s multiply the payout by four dividend payments, and then by 625 shares. The result is exactly $1,000.
For the final step here, multiply 625 shares by the actual stock price, and you’ll stick the landing at $29,687.50. The exact investment will vary as Cisco’s share price moves, but the required share count will stay the same.
Is Cisco a good income investment?
The dividend data paints Cisco as a robust income investment. The company has a long history of paying dividends and increasing them regularly, stretching back to a quarterly payout of $0.06 per share in 2011.
The dividend boosts have been smaller in recent years, but the data security and networking veteran’s board of directors still insists on a small annual increase. That includes this era of unpredictable economic swings, leading to unstable cash flows for Cisco.
As a result, Cisco’s annual dividend yield has averaged 3% over the last 10 years and 3.1% in five years. Look up “stable dividend yields” in a dictionary, and you might just find a Cisco logo on that page.
Overall, Cisco’s stable dividend payouts and consistent growth make it an attractive option for income-seeking investors. And you can start earning $1,000 a year in dividend payments by investing less than $30,000 in Cisco Systems.
Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cisco Systems. The Motley Fool has a disclosure policy.
