Tickers in this Article: CSCO, INTC, MSFT, ORCL, DELL
Consumer advocate and former presidential candidate Ralph Nader has a new issue on his mind these days, as he is now turning his attention to being a shareholder advocate. Specifically, Nader has turned his focus to tech bellwether Cisco (Nasdaq:CSCO).

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Show Me the Money
To be sure, Nader has his own motives this time, but self-interest is not necessarily a bad quality in a capitalistic society. Nader is a long-time shareholder of Cisco. He has owned shares in Cisco since 1995, paying an adjusted price of $7 a share. Nader has held his shares ever since, so he has experienced the joy of a high valuation in the late 1990s, followed by years of pain as shares have gone nowhere. At one point, Nader's 18,000 shares were worth over $1 million. Today, based on a $15 share price, that stake is worth around $278,000.

Nader's stance is quite clear. Since Cisco shares have done nothing for shareholders over the years, he wants the company to pay out its cash to shareholders. Specifically, Nader wants Cisco to pay a one-time special dividend of $1 a share, and boost the annual dividend to 50 cents a share from today's 24 cents.

Cheap Stock or Dormant Stock?
Looking at the numbers, Cisco trades at attractive valuation multiples. The stock boasts a market cap of $84 billion, but an enterprise value of $58 billion. About one-third of the company's market cap is in cash. In the tech space, Cisco arguably has the most overcapitalized balance sheet. Shares also trade for under nine-times forward earnings. That's in line with Microsoft's (Nasdaq:MSFT) forward P/E of 8.8 and Intel's (Nasdaq:INTC) forward P/E of 9. But in terms of cash relative to market cap, Cisco rules. On an annual basis, Cisco pulls in nearly $10 billion in free cash flow per year. Intel has averaged about $7 billion in free cash flow over the past three years, and has an enterprise value of $100 billion.

To be sure, only $5 billion of Cisco's cash is in the U.S. The rest is overseas, and would be taxed if repatriated back to the U.S. Still, Cisco's ample cash generation is more than enough to support returning cash to shareholders. Cisco's current dividend yield of 1.6% is amongst the lowest in the industry. Microsoft yields 2.6% while Intel yields 3.6%, respectively. Names like Oracle (Nasdaq:ORCL) and Dell (Nasdaq:DELL) pay little or no dividends, but are showing signs of growth.

The Bottom Line
Nader's efforts against Cisco will be interesting to watch. He certainly has the wind at his back, as no long-time Cisco shareholder can disagree with the dormant performance of the shares. (For more, see Cisco - Value Trap Or Great Value?)

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