This Well-Known Company Could Pay A 40% Dividend Yield
Just a few years ago, a select group of companies started doing something extraordinary…
They created a “Dividend Vault” with billions of dollars inside it — one of the largest cash stockpiles on earth.
They did it because these companies have seen the same problems you have over the past decade — a mounting debt crisis in America and Europe… gridlock on Capitol Hill… a stock market that plummeted 40% from the housing bubble burst… to name just a few.
Facing these challenges and many more, they took action to protect themselves and their shareholders.
#-ad_banner-#Now, after years of quietly socking away billions of dollars, U.S. companies have an incredible $1.925 trillion held within the “Dividend Vault,” or enough money to give every retiree in America a check for $112,264. (To read my previous article on the “Dividend Vault,” go here.)
And now, with few other options for growth, many of these companies have finally started opening the “Dividend Vault” to pay investors directly in the form of dividends.
Today I’d like to tell you about one company that holds an exceptionally large share of the “Dividend Vault”…
This well-known tech giant is one of the world’s largest Internet equipment providers. Chances are you’re using one of its products right now. However, I’m not here to talk to you about this company’s products.
What’s important to know is that with a 67% market share, this company dominates its field. In fact, it is by far the largest player in its industry.
It’s also involved in a high-margin business. As a result, this company generates massive amounts of cash every quarter. And management is doing everything it can to return that money to investors.
Let me explain…
During one of the most difficult business climates ever, the company has generated net income of up to $9.9 billion a year and has bought back more than 783 million shares of stock since 2008… including $4.4 billion worth of stock in 2012 alone.
Right now this company is more profitable than such well-known success stories as McDonald’s (NYSE: MCD), American Express (NYSE: AXP) and Disney (NYSE: DIS)… just to name a few.
That kind of dominance has drawn the attention of the world’s top investors.
Donald Yacktman runs a $9 billion mutual fund that has beaten 99% of its peers over the last 15 years. Through the Yacktman Asset Management Company, the billionaire started adding shares of this stock in late 2010. Since then he’s added to his position 9 times, including a recent purchase of an additional 12.1 million shares — one of his largest purchases.
Jeff Auxier, an elite fund manager known for crushing the market over the 2000s, essentially “tripled-down” on this company’s stock a few months back. He added to his position by a whopping 312% — going from 11,000 shares to 48,000.
It’s easy to see why these billionaires are so high on this stock right now. As of today, this company — Cisco Systems (Nasdaq: CSCO) — has accumulated $48 billion in cash.
That’s enough money to pay every shareholder a 40% special dividend right now.
For years, Cisco has been vaulting away most of this cash. But not anymore…
In 2011 the company announced its first ever dividend payment. And since then, it’s already raised its dividend three times for a total increase of 183%. That’s enough to turn a $1,000 dividend stream into $2,830.
Even after more than doubling its payout, the company still has $48 billion sitting in its “Dividend Vault.” As this vault grows, I think Cisco’s payouts will continue to increase for years.
Of course, with investing there’s never a surefire thing. There’s no quality a company can possess that will guarantee its success.
But when you can find companies like Cisco that dominate their market and are returning billions to investors, these are the sort of stocks that can still deliver strong returns in nearly any market.
I recommend buying the stock up to $25 a share with a price target of $33 a share.
Note: Cisco is just one of 13 stocks I’ve discovered that controls an enormous share of the $1.9 Trillion “Dividend Vault.” In my latest report, I talk about 12 other “Dividend Vault” stocks, including a global power house that’s already increased its dividend 633% in the past two years, plus another firm that’s boosted its dividend 131% since 2011 and still yields 10.8%. To get more info on these stocks before they start mailing their next “Dividend Vault” checks this Friday, March 14, follow this link now or click the video below.