- Juniper Networks is a blue-chip player in IT infrastructure and networking.
- The company's offerings continue to expand and fuel a solid dividend.
- Juniper Networks offers high yield for tech and a relative value for investors.
Ready to learn more about Juniper Networks stock?
The key takeaway: Juniper Networks is a lightly valued, blue chip tech stock fundamental to connecting the world via the internet and a critical cog in the global supply chain.
By the time you’ve read this article, we'll have the answer to "What is Juniper Networks?", its competitors, its products and how the stock may fit into your portfolio.
What is Juniper Networks?
Juniper Networks is a multinational provider of networking and IT solutions globally. The company makes a wide range of components and devices that connect and route internet and data connections for business, industry and private use. The company also provides software, cloud-based services and other services to enhance its product portfolio. Among its many advances is the application of AI to network routing which can enhance user experience and simplify operations across domains. The company was founded in 1996 and brought in over $730 billion in revenue in fiscal year 2021.
Juniper Networks is not a Dividend King or Dividend Aristocrat.
What is a Dividend Aristocrat? A Dividend Aristocrat is an S&P 500 company that has raised its dividend payment for at least 25 consecutive years.
What are Dividend King stocks? A Dividend King is a company, not necessarily an S&P 500 company, that has raised its dividend payment for at least 50 years.
Learn more: Should you choose Dividend Kings vs Aristocrats? Both offer safety and protection from inflation with their ever-growing distributions.
Juniper Networks Competitors
Juniper Networks controlled more than one-third of the core router market at one time but that market share has dwindled in the face of growing competition. Cisco used to be its primary adversary but Juniper Networks competitors now include names like Fortinet and Palo Alto Networks, among many others.
Juniper Networks has diversified its business model over the past two decades and is engaged in more than just core routing services. The company’s market share of IT infrastructure as a whole is about 4% with varying degrees of dominance in the underlying product categories. Product categories range from firewalls to AI, routers to network automation and security and wireless and edge computing.
Juniper also makes the following products:
- Apstra: Apstra is an intent-based software product and operating system that automates data center networks from concept to deployment and operations.
- Junos: Junos is an operating system deployed across all Juniper products that provide for a seamless, end-to-end experience.
- Marvis Virtual Network Assistant: Marvis uses Juniper’s proprietary AI to enhance network operations and user interface.
- Mist AI: This product leverages AI, machine learning and data science to enhance operations and simplify operations across domains.
- Network automation: Juniper Networks can help set up an automated network that works seamlessly in multi-vendor situations.
- Routers: Juniper Networks offers a wide range of routers and routing solutions for service providers, data center operators, businesses and industries.
- Security/advanced threat protection: Juniper Networks’ security solutions begin with the network and harness the power of AI to detect threats and prevent them from deploying.
- Wireless Access Points and Edge: Juniper Wireless Access points are best-in-class wireless routing devices that work alongside Mist AI and Cloud. The Edge solutions extend microservices for improved agility and scale for large networks.
Is Juniper Networks Inc. Undervalued?
Juniper Networks Inc. is not undervalued but it is lightly valued when trading at only 15.5x its earnings. This valuation puts it in line with the average S&P 500 company but it has some things going for it that the average S&P 500 doesn’t have, including a higher-than-average 2.8% dividend yield and ample room for dividend growth.
In relation to its competitors, the valuation comparisons are mixed, with valuations ranging from 12.5x for Cisco to 33x for Ciena and higher for some other, younger, growth-oriented names. The takeaway is that only Juniper Networks and Cisco pay a dividend. Cisco comes with a higher yield and lower valuation and its distribution is healthy and growing.
Juniper Networks Stock Rating
Juniper Networks share price is supported by the analysts which have a consensus rating of "strong hold" verging on "buy." The consensus rating is down slightly on a year-over-year (YOY) basis but held steady over the first three quarters of 2022. It also comes with an upward-trending price target. The consensus price target of $33.94 implies about a 15% upside for the stock with shares trading at $30. It's up in the 12-, three- and one-month comparisons. The analyst's activity post-Q3 earnings include five commentaries that all include a price target increase. The caveat here is the consensus of the five new targets is in line with the consensus so may not become a major catalyst on its own.
Juniper Networks Share Price and Stock History
Juniper Networks share price and stock history is an interesting tale of boom and bust and rebirth that could lead to outsized gains for investors. The company began trading on the NYSE in 1999 just as the tech boom picked up momentum. The price skyrocketed for the next year and hit a high of $244.50, more than 10x the IPO price. Those prices didn’t hold long and the tech bust led to a massive implosion in share prices that has only recently begun to correct itself.
The price action in Juniper Networks has been choppy since the tech bust but there are two factors of interest for investors. The first is that price action has made fairly consistent swings within an upward-drifting range. This means it is a good choice for buy-on-the-dip strategies and investors looking to build a portfolio of dividend stocks. Dollar-cost average can add to positions anytime the stock moves to the bottom of the range and leverages gains as well as dividends.
Growth and IPO
Juniper Networks went public on June 25, 1999, after raising its intended price several times. The opening trades were above the expected price and the stock moved steadily upward from there. The first few years of the company’s business were spent solidifying its grip on the core router market, building its market share to near 35% at the peak. Since then, the company has expanded into AI, Cloud, Edge and security services, which round out its offerings. In terms of growth, the company’s growth has been sketchy over the last two decades as increased competition in the networking arena has been offset by expansion into other businesses.
Acquisitions and Investments
Juniper Networks has grown steadily since its founding, making investments in organic technology as well as acquiring other businesses. The company has purchased or otherwise acquired many businesses that enhance, expand or round out its offerings. The latest was Apstra, an intent-based networking solution purchased for an undisclosed amount.
Juniper Networks Earnings
The most noteworthy item about Juniper Networks earnings, other than the fact it has a positive cash flow, is that it is very steady. The company’s efforts to diversify were as much a necessity as a strategy and worked to offset weakness in the routing business as competition grew. The earnings power is also fairly seasonal/cyclical in nature and tends to fluctuate on a quarter-to-quarter basis.
The most important factor, however, is that cash flow and free cash flow are steady and able to support the 2.8% dividend yield. The payout ratio is moderately high at 45% but offset by low debt and incredibly low leverage. In this light, investors might expect this budding dividend growth stock to continue raising the distribution as it has done over the past few years. The company has the potential to become a Dividend Aristocrat but it will take time and patience for investors.
Juniper Networks Revenue
Juniper Networks revenue can be characterized in the same way as its earnings. The company’s efforts to diversify have done more to offset other weaknesses than anything else and resulted in a steady revenue stream and not a growing one. Revenue fluctuates on a sequential and YOY basis so growth can be present — it just hasn't been sustainable for more than a quarter or two for a long time. Revenue appears to be safe and fuels healthy earnings and a solid dividend.
Juniper Networks: A Steady, Stable Choice for Dividend Investors
Juniper Networks is not a flashy name in tech. It’s not a growth stock and Juniper Networks stock price is not exactly a bargain but it does have many attractive qualities. Among them include its steady revenue stream and earnings power and its dividend yield, which has been growing on a distribution basis, if not on a regular and consistent annual basis. Investors looking for easy-to-own, buy-and-hold dividend-paying stocks that they can use to build an income-generating portfolio might consider Juniper Networks for a core holding.
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Companies Mentioned in This Article:
|Company||Current Price||Price Change||Dividend Yield||P/E Ratio||Consensus Rating||Consensus Price Target|
|Juniper Networks (JNPR)||$28.75||-0.5%||3.06%||25.67||Hold||$33.00|