Cisco Systems Inc., the world's largest maker of computer networking gear, on Friday said its first-ever cash dividend will amount to 6 cents per share and will be paid on April 20.
The company has said since last year that it would start paying a dividend equating to an annual yield of 1 percent to 2 percent, but had not specified the amount or precise timing.
The dividend amounts to an annual yield of 1.4 percent at Thursday's closing price of $17. The shares hit a 52-week low of $16.97 in Thursday trading.
In pre-market trading Friday, the shares were up 47 cents, or 2.8 percent.
The dividend will be paid to shareholders of record as of March 31.
Technology companies like to hold on to their cash, investing it in their own growth rather than paying dividends. But several of them have started paying small dividends as they find their business maturing. Microsoft Corp. introduced a dividend in 2003 and now carries a 2.6 percent annual yield. Hewlett-Packard Co., which competes with Cisco in many fields, has a yield of 0.8 percent.
Among the holdouts that don't pay a dividend are Apple Inc., Dell Inc. and eBay Inc.
San Jose, Calif.-based Cisco said its "leadership position in the markets we serve is strong," making this the time to reward shareholders.
Cisco has already been transferring cash to shareholders through stock buybacks. Most recently, it authorized a $10 billion buyback program in November.
The dividend will cost $1.3 billion annually. Cisco had $40.2 billion in cash in February, but only $3.1 billion is in the U.S. The rest sits at overseas subsidiaries.
Cisco has been reluctant to repatriate that money, because it will then be taxed at the 35 percent U.S. corporate tax rate. It's lobbying Washington for a tax amnesty on overseas earnings, and CEO John Chambers has linked that effort to the size of the dividend.
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