CSCO vs TXN: Dividend Yield, Growth & Safety Comparison
Cisco Systems, Inc. (CSCO) and Texas Instruments Inc (TXN) are both in the Information Technology sector, making them natural rivals for dividend investors. TXN edges ahead on yield at 2.49% versus CSCO's 1.89%. For dividend growth, TXN leads with a 5-year CAGR of 14.6% versus CSCO's 10.1%. TXN holds the edge in dividend safety with a "Safe" rating.
Key Metrics Comparison
| Metric | CSCO | TXN |
|---|
| Dividend Yield | 1.89% | 2.49% |
| Annual Dividend | $1.63 | $5.50 |
| 5-Year CAGR | 10.1% | 14.6% |
| Payout Ratio | 63% | 1% |
| Consecutive Years | 0 | 0 |
| Price | $77.17 | $226.09 |
Yield Comparison
Texas Instruments Inc (TXN) currently yields 2.49%, which is solid for the broader market. That's 0.60% more than Cisco Systems, Inc. (CSCO), which yields 1.89%. In dollar terms, TXN pays $5.50/share annually versus CSCO's $1.63/share.
Dividend Growth
Over the past five years, TXN has grown its dividend at a 14.6% CAGR compared to CSCO's 10.1%. CSCO: Dividend growth is accelerating — the 3-year CAGR of 18.0% exceeds the 5-year rate of 10.1% and the 10-year rate of 8.5%. TXN: Dividend growth is accelerating — the 3-year CAGR of 20.6% exceeds the 5-year rate of 14.6% and the 10-year rate of 17.8%.
Dividend Safety
CSCO's dividend safety is rated "Moderate." The payout ratio of 63% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.6x. TXN's dividend safety is rated "Safe." The payout ratio of 1% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.0x. TXN's payout ratio of 1% is more conservative than CSCO's 63%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in TXN generates approximately $249/year in dividend income, compared to $189/year from CSCO — a difference of $60/year. At $100,000, that gap widens to $600/year.
Verdict
- Best for income: TXN
- Best for growth: TXN
- Best for safety: TXN
Frequently Asked Questions
Which has a higher dividend yield, CSCO or TXN?
Texas Instruments Inc (TXN) has a higher dividend yield of 2.49% compared to Cisco Systems, Inc. (CSCO) at 1.89%.
Is CSCO or TXN a better dividend growth stock?
Texas Instruments Inc has the stronger dividend growth with a 5-year CAGR of 14.6%, compared to Cisco Systems, Inc.'s 10.1%.
Which is safer for dividend income, CSCO or TXN?
Cisco Systems, Inc.'s dividend safety is rated "Moderate" while Texas Instruments Inc is rated "Safe." The payout ratio of 63% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.6x. The payout ratio of 1% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.0x.
How much income does $10,000 in CSCO vs TXN generate?
A $10,000 investment in CSCO generates approximately $189/year in dividends, while the same amount in TXN generates about $249/year.
Which has a lower payout ratio, CSCO or TXN?
Texas Instruments Inc has a lower payout ratio of 1% compared to Cisco Systems, Inc.'s 63%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
CSCO vs TXN: which is better for retirement income?
It depends on your priorities. TXN for current income, TXN for dividend growth, TXN for safety. Many retirement investors hold both for diversification.
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