I rarely point out good calls that we make, but believe today’s talk of Cisco paying a dividend, if confirmed, is worth mentioning.  According to briefing.com, Cisco just made the following comment today at their analyst meeting: “On the dividend, co agrees that the time is right in FY11, it sees a 1-2% yield.” 

We pointed to this likelihood in an update  and on CNBC  about three or four weeks ago.  To be specific, we made the following comment: 

“Mark my words; we could be on the cusp of a major sea change in the markets, one in which cash rich companies – in far better shape than government – begin to compete for investors through the dynamics of dividend yield.  Investors who can start to capitalize on these changes now are likely to benefit as the groundswell for all things bonds begins to find a suitable and potentially even safer path towards stocks with rising dividends.”

I suspect that more companies will do this type of thing and the result of it could help draw money away from the bubble in bonds and actually help stock prices in the future rather than hurt them under the common bearish interpretation that paying a dividend might mean that a company’s growth years are behind it.  While I did share my thoughts with several employees at Cisco, I had no idea that they might, if the briefing article is accurate, be among the first to actually consider it.  

I think it is a very wise move; I agree, the time is right.