How Safe Is Cisco and Its Dividend?

Cisco Systems' (NASDAQ: CSCO) year-over-year revenue decline accelerated during the last quarter, and management expects this trend to continue over the next one. Should investors worry about a potential secular deterioration of the old tech giant's businesses, which could threaten its juicy dividend beyond the short term?

As several billion people have been staying at home over the last couple of months to try to limit the spread of COVID-19, several tech companies have disclosed a significant surge in the use of their cloud-based products and services over that time frame. Looking forward, the adoption of cloud computing may accelerate as employees and enterprises have been experiencing this flexible way of working.

Cisco offers on-premises and cloud collaboration, networking, and cybersecurity solutions that address the needs of on-site and remote workers. But in contrast with many high-growth cloud-based companies, the old tech giant posted a year-over-year revenue drop of 8% during its fiscal third quarter, down to $12.0 billion. And management forecasted next-quarter revenue to decline to a range of 8.5% to 11.5% because of coronavirus-induced challenges.

Source Fool.com