Cisco (CSCO)

It's done really well, but he's starting to wonder how much more room it has to run. Same with Microsoft. They're seeing limited headway in China and emerging markets. Current valuations are stretched.

He has been recommending this for years. It is finally hitting new highs. His model price is $58.76 or a 24% upside. It is finally getting its mo-jo. (Analysts’ target: $50.04).

Technology in general is the place to be in terms of growth for the next 2-3 years. Trades at reasonable multiples. New management is doing a good job. Good growth prospects. (Analysts’ price target is $50.04)

Revenue growth has been flat for the past five years, but they are sitting with $30 billion in net cash. The dividend has doubled over the past five years and he expects that to repeat. It is somewhat out of favour due to the lack of revenue growth.

Amazon just said that it is going to start selling servers. Cisco took a hit on that. His model price is $53.16 which indicates a 25% upside. Cisco is a lot more than servers so there is opportunity for this to be a wake-up call to the Board that does more good than harm. (Analysts’ price target is $48.42)

What tech stocks have growth and pay 4% dividends ? Cisco which is trading around $42. He owns it. Pays a dividend above 3%. IBM (he doesn't own it) who are turning it around. Right now in the low-$140's is a good time to buy it.

It's held up well in the past year with a rising 200-day moving average. Not a high-grow company, maybe 6% a year. It doesn't excite him. Other such companies are growing faster.

They have had a pullback recently and he feels that even at these multiples it is still too expensive at 16 times earnings. He thinks there is room for further retracement. They have had an aggressive acquisition strategy to expand the business into new sectors, like cyber security. He would look at it at ideally near 13 times earnings. (Analysts’ price target is $49)

He sees a 23% upside. They pay a dividend of over 3%. Earnings didn’t hit the high note he wanted last quarter, and the stock has paused this quarter, but he is optimistic over the next 3 to 5 years. (Analysts’ price target is $48.52)

He recently bought this just before the earnings season for Q1 back in February. He added to his position. This fits into his theory of 5G deployment growing quickly, since this company supplies the switching equipment and routers. A good long term hold. He would buy more below $37.50.

Well-run company but it has been trying to overcome many problems. It’s ultimately a hardware manufacturing company. The only hardware manufacturing company that has been successful is Apple Inc. (AAPL-O). Very challenging industry. All the trade war with China is not helping. He would go on the software side.

Good turn-around story a couple of years ago. He prefers other ways to play the technology space. It had a big run. He would wait for a pullback to buy at a more attractive valuation.

Is it a company to own for long-term dividend growth and safety? It is trading a little cheaper compared to its 5-year average. 3% dividend yield and they will probably grow that. It is a safe stock. He thinks there are better value in another tech stocks.