Cisco Buckles to Dividend Pressure, Who’s Next? (CSCO, AMZN, AAPL, ADBE, DELL, GOOG, EBAY, EMC, CRM, VMW, YHOO)

Cisco Systems Inc. (NASDAQ: CSCO) has finally buckled to pressure to return capital to shareholders.  While we did not get the promise of a one-time massive dividend we outlined as a possibility, John Chambers has finally promised to pay out a yield of 1% to 2% starting in 2011 and a dividend payment will start this year.

We outlined all of the  pressure and ramifications just this morning, but this brings up the “Who’s next? scenario.  Many other technology giants do not offer any dividends at all today.  Some of the remaining large-cap technology stocks that still do not offer dividend payments are Amazon.com Inc. (NASDAQ: AMZN), Apple Inc.(NASDAQ: AAPL), Adobe Systems inc. (NASDAQ: ADBE), Dell Inc. (NASDAQ: DELL), Google Inc. (NASDAQ: GOOG), eBay Inc. (NASDAQ: EBAY), EMC Corporation (NYSE: EMC), Salesforce.com (NYSE: CRM) VMware, Inc. (NYSE: VMW), and even Yahoo! Inc. (NASDAQ: YHOO).

The pressure is on.  It’s time for technology managers to get those corporate checkbooks out and start rewarding their shareholders just like other companies have to.  What has been witnessed in this move is the maturity of a sector.  If companies do not want to pay dividends to shareholders, perhaps analysts should tell management after cash values get too high that perhaps the only measures that matter are GAAP accounting rather than “pro forma” and non-GAAP accounting.

Of those mentioned above, the most able to pay is Apple with its cash arsenal of more than $40 billion.  Salesforce.com and VMware are high-beta names and have multiples too high and are actually young enough that it could be years before investors have the right to demand any cash payments.  Amazon.com also has a high valuation that may prevent much great on the cash dividend front there.  Google has also been public less than a decade, so it should not be forced into a must-pay situation as soon as others.  Those which could easily pay handsome dividends are Dell, EMC, eBay, and Yahoo!.

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JON C. OGG