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Believe Cyberthreats Are on the Rise? This Is the Company to Play.


Here's the the company that serves as the "911" for data managers worldwide when internet security is breached.

That's where Cisco comes in. The company's security innovations provide firewall, Web, and email security and intrusion prevention, while also facilitating mobility and telework.

Cisco is one of the biggest suppliers of Internet-based networking products; the company's routers and switches are pervasive in offices, classrooms, and government offices around the globe. The company will continue to benefit from the accelerating trend of around-the-clock, global connectivity-and the cybercrime that it spawns.

The phenomenon of cybertheft is exacerbated by the growing involvement of organized crime. Many financial losses have been traced back to the bank accounts of specific criminal organizations, especially in Russia and Eastern Europe. These tech-savvy gangsters won't whack you; they'll hack you.

According to research firm IDC, the global network security market, described as hardware and software with functionality that includes firewalls, virtual private networks (VPNs), intrusion prevention and detection, and multi-purpose security known as unified threat management, racked up revenue of $8.16 billion in 2011, an increase of 8.1% from the previous year. This sector is on track for similar growth in 2012.

As the networking and security leader, Cisco is reaping the spoils.

In November, Cisco reported first-quarter fiscal 2013 revenue of $11.9 billion, an increase of nearly 6% year over year that blew away analysts' expectations of $11.7 billion.

Earnings rose 18% to $2.1 billion; earnings per share (EPS) came in at $0.48, a year-over-year increase of 12%. The company's service provider video and wireless segments both saw significant growth of 30% and 38%, respectively. This latest quarter marks the fourth consecutive positive earnings report for the company.

So far this year, Cisco had bought back 3.8 billion shares of stock at a cost of $76.4 billion, with $5.6 billion remaining in its current buyback plan. The company raised its dividend after last quarter from $.08 to $0.14 per quarter, for a current yield of 3.11% that's only a 37% payout.

Cisco's trailing price-to-earnings (P/E) ratio of 12.1 and its price/earnings to growth (PEG) ratio of 1.1 make the stock an enticing value proposition. Analysts' consensus calls for the company's earnings to grow 32% and revenue 5.7% in 2013.

As investors view the tumultuous markets with a wary eye, this technology stock provides both growth and safety.

This article by John Persinos was originally published on Investing Daily.

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