Cisco (CSCO) has been nothing short of an impressive dividend growth stock since it began paying dividends in 2011.

The company’s quarterly dividend payment has increased from 6 cents per share in 2011 to 26 cents most recently, including management’s 24% boost to the dividend in February 2016.

With a low price-to-earnings multiple, a dividend yield near 4%, and very strong Dividend Safety (87) and Dividend Growth (80) scores, Cisco has caught the attention of many income investors.

Let’s take a closer look at the investment case for Cisco as we consider the stock for our Top 20 Dividend Stocks and Conservative Retirees dividend portfolios.

Business Overview

Cisco was founded in 1984 and has grown to become one of the most important technology companies in the world. While the business sells a wide variety of products (77% of sales) and services (23%) to businesses of all sizes, its main offerings connect computing devices to networks or computer networks with each other.

The company’s website provides an overview of switches (39% of product sales) and routers (20%), which are Cisco’s largest segments.

Switches are used in buildings, campuses, offices, and data centers to connect devices such as workstations, servers, and phones together on a computer network. They help receive and forward data to the right device.

Routers pass along data packets between computer networks to connect wireline and mobile networks used for mobile, data, voice, and video applications. They essentially direct the internet’s traffic to the appropriate destination.

The rest of Cisco’s product revenue is spread between a number of faster-growing segments – Collaboration (11%), Data Center (9%), Wireless (7%), Service Provider Video (9%), and Security (5%). Most of Cisco’s products and services are sold through channel partners such as telecom providers and systems integrators.

The company’s service revenue consists of technical support, subscriptions, and software that are spread across its various segments.

By geography, approximately 60% of Cisco’s sales last fiscal year were in the Americas with another 25% in EMEA (Europe, the Middle East, and Africa) and 15% in Asia.

Business Analysis

Cisco dominates most of its core markets. According to IDC, Cisco’s share in the Ethernet switching market was 59.2% at the end of the third quarter of 2015. The company’s market share in routers is also in excess of 50%.

As seen below, no other vendor comes close to Cisco’s dominance in these markets.

Source: IDC

Synergy Research reported similar figures and noted that Cisco is about seven times the size of its next largest rival in switching and routing technologies.

Why has Cisco been able to dominate these markets?

Cisco’s advantage starts with its ability to offer customers an entire suite of solutions with its network equipment and services. The company has evolved from selling networking hardware into selling higher-value packages of complete architectures and solutions that improve customers’ businesses.

Selling architectural solutions is much more profitable for Cisco and allows the customer to deal with fewer vendors and potentially enjoy a lower total cost of ownership.

Most of Cisco’s competitors do not have the same breadth of products and services (e.g. security, switching, wireless, routing, collaboration), making them less of a factor in these lucrative deals.

Cisco has spent more than $18 billion on research and development over the last three years combined to stay relevant and build out its portfolio, a magnitude of spending that few companies can come close to matching.

Cisco also has about $2 billion in venture capital investments that help it gain forward-looking insights into the changes its markets are going through.

To continuously round out its portfolio to meet the market’s evolving needs, Cisco has spent more than $80 billion since 1995 to acquire over 250 companies and has also partnered with major technology players such as EMC, VMware, Ericsson, and Apple.

Simply put, it’s very difficult for competitors to match the company’s breadth of products and services.

By focusing on developing extremely reliable hardware, building a brand based on quality, and using its economies of scale to keep costs low ($49 billion revenue base last year), Cisco typically enjoys price premiums and very healthy margins on its products.

Beyond its technology portfolio and unique ability to deliver architectural solutions, Cisco is a sales and marketing juggernaut that has established one of the 15 most valuable brands in the world.