Cisco Systems Inc. plans to pay a cash dividend to shareholders for the first time, helping appease investors' concerns about its growth and eroding margins and sending its shares up nearly 3% on Friday.
Avian Securities analyst Catharine Trebnick told Reuters the quarterly dividend of $0.06 per share, which will be paid to shareholders starting on April 20, broadens the company's appeal to Wall Street as its growth has waned in recent quarters.
"This gives Cisco another class of investors to bring into the stock who are more interested in a dividend payout, rather than high growth," she said.
Cisco, along with Apple Inc. and Google Inc. had been one of the few remaining cash-rich tech companies to resist dividend payments, prioritizing share repurchases and growth through acquisitions, according to the news service.
