Cisco Systems, Inc. (NASDAQ:CSCO) stock is suitable for conservative investors, and it has a steady, rising dividend
Cisco Systems (NASDAQ:CSCO) stock is one of the hottest tech stocks of 2019, as investors prioritise safety over all else.
Cisco stock is up 19% in 2019, but its dividend, recently hiked to 35 cents per quarter, still pays a nice yield of 2.71% as of this morning. And the price-earnings ratio of CSCO stock is under 19, so the shares aren’t expensive.
Best of all, that dividend is covered twice-over by earnings. Cisco has shown a commitment to the payout since 2011, when it was started at 6 cents per share. Investors who bought Cisco stock then, when the price of the shares was a little over $17, have tripled their money and now have a double-digit yield that looks as solid as Microsoft’s (NASDAQ:MSFT) payout.
The 5G Hype
Cisco stock should keep rising thanks to the hype over 5G, the new wireless technology everyone’s talking about at this week’s Mobile World Congress.
CSCO is making one of the biggest investments in the new technology, but 5G has yet to positively impact its results. Cisco’s revenue of $12.4 billion for the quarter ending in January was actually its lowest quarterly revenue in a year, and just 7% ahead of last year’s $11.9 billion.
The launch of 5G will require both wireless and wireline networks to be rebuilt. The new technology takes advantage of higher frequency bands and can match the gigabit-per-second speeds of the latest wired systems. Additionally, new application spaces based on adding computer controls for objects and devices should increase demand for Cisco’s entire line of networking gear.
Meanwhile, CSCO has transformed itself from a company with seasonal results based on hardware sales to one with steady results based on subscriptions for software, including security tools.
The Cisco of CEO Chuck Robbins is very different from that of his predecessor, the legendary John Chambers. Now Cisco stock appeals to a different type of investor than in the past. Chambers created enormous capital gains in the 1990s. In fact, at the turn of the century, CSCO was the most valuable company on the planet. Robbins’ CSCO is more conservatively managed, focused on delivering a steady stream of earnings and dividends to more conservative investors.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 47.72.
The projected upper bound is: 54.09.
The projected lower bound is: 49.69.
The projected closing price is: 51.89.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 30 white candles and 20 black candles for a net of 10 white candles.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 93.1818. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 10 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 79.32. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 5 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 128.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 10 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 37 period(s) ago.
Rex Takasugi – TD Profile
CISCO SYSTEMS closed up 0.180 at 51.770. Volume was 23% above average (neutral) and Bollinger Bands were 14% wider than normal.
Open High Low Close Volume___
51.550 51.960 51.355 51.770 30,708,460
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 50.20 45.75 45.30
Volatility: 15 32 30
Volume: 24,896,866 24,333,834 22,980,094
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
CISCO SYSTEMS is currently 14.3% above its 200-period moving average and is in an upward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into CSCO.O (mildly bullish). Our trend forecasting oscillators are currently bullish on CSCO.O and have had this outlook for the last 25 periods. Our momentum oscillator is currently indicating that CSCO.O is currently in an overbought condition.
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