10 Best Dividend Paying Stocks To Buy According to Quant Hedge Fund AQR

4. Cisco Systems, Inc. (NASDAQ:CSCO)

AQR Capital’s Stake Value: $458,123,113

Dividend Yield as of August 22: 3.17%

Cisco Systems, Inc. (NASDAQ:CSCO) ranks fourth on our list of the best dividend-paying stocks. The American digital communications tech company is reporting strong results, experiencing consistent customer demand, with growth across its operations as clients depend on Cisco to connect and safeguard all areas of their organizations in the age of AI. In its fiscal Q4 2024, the company reported revenue of $13.6 billion, which beat analysts’ estimates by $106.2 million. Its revenue, gross margin, and EPS in Q4 were at or above the high end of the guidance range, reflecting the company’s operational discipline. Moving forward, the focus remains sharply on growth and consistent execution, with strategic investments in AI, cloud, and cybersecurity, while continuing to prioritize capital returns.

Cisco Systems, Inc. (NASDAQ:CSCO)’s $28 billion acquisition of Splunk earlier this year is a key part of its strategy for cyber threat improvement. The addition of the data analytics and cybersecurity firm proved beneficial, contributing $960 million to the company’s revenue in fiscal Q4 2024. The investment has led the company into a net debt position, aimed at supporting growth and boosting returns for shareholders. CFO Scott Herren mentioned in an interview that the company will have the option to either reduce its debt or keep it, depending on future interest rates. He highlighted that Cisco Systems, Inc. (NASDAQ:CSCO) will focus on disciplined capital allocation and growth investments rather than solely targeting debt reduction.

That said, Cisco Systems, Inc. (NASDAQ:CSCO)’s debt position shouldn’t be the main concern for investors because of its strong cash generation. The company’s operating cash flow in the most recent quarter was approximately $3.7 billion and it ended the quarter with nearly $18 billion available in cash and cash equivalents. Reflecting the CEO’s focus on capital allocation, the company returned $1.6 billion to shareholders through dividends.

Cisco Systems, Inc. (NASDAQ:CSCO) offers a quarterly dividend of $0.40 per share and has a dividend yield of 3.17%, as of August 22. It is one of the best dividend-paying stocks according to AQR Capital as the company has been rewarding shareholders with growing dividends for the past 17 consecutive years.

According to Insider Monkey’s database of Q2 2024, 61 hedge funds owned stakes in Cisco Systems, Inc. (NASDAQ:CSCO), growing from 58 a quarter earlier. The consolidated value of these stakes is roughly $1.6 billion.