Tomahawk, WI 11/12/2013 (BasicsMedia) – Cisco Systems, Inc. (NASDAQ:CSCO) is a looking at a bright future given its leadership position in IT and the optimism that is now surrounding the economic improvement being witnessed in the U.S. and some parts of the world. There is optimism that spending in IT departments is likely to go up. This is particularly so as the government seeks to create jobs and businesses investing to boost their sales and improve their data security. In this regard, Cisco appears well positioned to make massive value gain in financials as well as stock.

Cisco is generally a strong stock for long term investment considering its solid market share and impressive growth in the recent years. The company’s average growth has peaked about 7.8% from 2008 to date. The company is projected to grow even higher in the coming few years. Cisco’s return on equity is also impassive, leading the tech industry at 17.8% while its earning per share is the third highest in the industry.  But just how has Cisco attained these heights? The company knows how to handle competition. It has a strong hand in promising acquisitions and its technological innovation division is just on top of the its game, putting it head and shoulder above the competitors.

That Cisco is well positioned to harvest from the improvement in tech spending can be seen in the company’s strong presence in the security programming segment having taken over SourceFire, a security software company. The company has also topped its cloud computing competitors IBM and HPQ in that key market. In the cloud computing segment, Cisco stands 15% higher than the two of its closest rivals. As if that is not enough, Cisco’s wireless business is booming, having gapped up 32% so far in the year.

In the most recent quarter, Cisco realized $0.59 a share earning, against $0.40 in the same quarter last year, translating into over 45% increase in per share earning. The company’s net income has grown by 44% from last year. Also its sales have seen an improvement of more than 5% from the same quarter a year ago. These are key fundamentals which leave no doubt where this stock is headed in both near-term and long-term.

Cisco is both a growth and dividend stock. Its dividend payout is way above that of its competitors. What’s more, the company has so far this year paid out $1.2 billion to its shareholders in form of shares buyback and dividend. It’s important noting that the company’s cash flow has improved in the most recent quarter by over 6%. According to the latest earnings data, Cisco’s net income now stands at $5.2 billion.

One area that is drawing Cisco back is the data center fabric switching. This is where Juniper and Brocade are threatening to eat its lunch. It’s particularly underperforming in WAN optimization, application delivery controllers and Wireless LAN. However, this is no cause for concern because this segment not only still has room for Cisco to claim a significant spot, but Cisco is also financially endowed to take on the competition. Consider its $40 billion in annual profits which effectively dwarfs that of its closest competitors. Cisco’s main competitors in the industry are Juniper Networks and Brocade Communications Systems.

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