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By Jason Stipp | 09-24-2010 06:00 AM

The Low-Payers Club

Which of the S&P's lowest dividend yielders could be paying more?

Jason Stipp: I'm Jason Stipp for Morningstar. Cisco announced last week that it was going to begin paying a dividend, somewhat surprising news for a lot of market watchers.

Here with me to talk about who else could be or maybe should be paying a dividend is Morningstar's Josh Peters, editor of Morningstar DividendInvestor and an equity strategist with Morningstar.

Thanks for joining me Josh.

Josh Peters: Good to be here, Jason.

Stipp: So last week, I had Pat Dorsey sitting here and he said, in response to the Cisco news that he could give John Chambers a big kiss, a big smooch, because he thought this was good news coming out of a tech company finally saying it could pay a dividend.

What's your response to the Cisco dividend?

Peters: One-handed applause. I mean literally, that's a line I used in my weekly communication with DividendInvestor subscribers. Just to say, the move was shocking. Came out of the blue, I think that John Chambers had made some reference that before he retired perhaps he'd like the company to start paying a dividend. But this really kind of came out of nowhere.

But to me, I look at it, and I say, 1% to 2% yield, and you're throwing out all of these qualifiers about tax policy determining how much you're going to pay your shareholders. The gap between what they could be doing and what they're actually doing is actually bigger in my opinion than the move that they are actually making.

Stipp: So, certainly we have seen some money piling up on corporate balance sheets. So, in the tech industry it is one thing, but also just broadly, it seems like companies are in better financial shape than they had been before. Do you think that we'll see a trend of more companies potentially starting to pay out, even if it's a little bit, starting to pay out a dividend?

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