Cisco (CSCO) - Get Report announces its highly awaited fiscal Q1 2020 earnings this Wednesday after hours.

Asides from a volatile share price these past several months, the underlying enterprise is remarkably stable and backed with strong shareholder returns.

Best of all, investors are not being asked to pay much at all for this stock and should consider Cisco as a rewarding investment opportunity. Here is why:

Looking Beyond Guidance

During Cisco's Q4 2019 results, management gave Q1 2020 guidance that caught investors unprepared, and forced the stock to sell-off by more than 10% post-earnings. What happened?

The main reason was that Q4 2019 revenues (excluding divestitures) had finished remarkably strong at 6% year-over-year growth and investors were expecting more of the same. Accordingly, when Q1 2020 was guided for just midpoint of 1% of revenue growth compared with the same period a year ago, shareholders found themselves less than impressed and sold the stock.

But investors needn't be worried because pushing aside concerns over Cisco's volatile revenue growth rates, Cisco's fundamental cash flows are very consistent and strong.

Stable Cash Flows not Being Appreciated

Cisco's cash flows from operations finished fiscal 2019 at $15.8 billion. Digging deeper, we should note that during fiscal 2019, Cisco received a non-recurring benefit from the Tax Cuts and Jobs Act, thus normalized for these benefits compared with fiscal 2018, its cash flows from operations increased by 8% rather than 16%.

Nevertheless, given that Cisco's software subscription revenues are now at 70% of total software revenue, this implies that going forward there should be even more stability and predictability to Cisco's revenues and margins, aspects which investors crave.

Strong Shareholder Returns

Given Cisco's increasingly steady cash flows, Cisco has committed itself towards returning at least 50% of its free cash flow towards a balance of dividends and repurchases. Presently, Cisco's dividend offers an appealing 2.9% yield.

Furthermore, we can see that even though Cisco's revenue growth finished 2019 up 6% year-over-year, through its consistent shares repurchases, its bottom-line fared better with its non-GAAP EPS increasing by 19% to $0.83.

Again, looking towards its Q1 2020 guidance, even at the midpoint of just 1% revenue growth, its consistent buybacks allow its bottom line to increase by 8% compared with Q1 2019 -- this high single-digit growth is nothing to sneer at.

Valuation - Large Margin of Safety

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As the table shows, the whole sector is being cheaply valued, as investors seek out more exciting investments. But in time, investors will return and reprice steadily growing companies like Cisco closer to intrinsic value.

Consider that Cisco's debt profile has become substantially more manageable of late, finishing Q4 2019 at just $25 billion which is easily offset by its $33 billion of cash and equivalents, thus holding a solid $8 billion of net cash.

Further, Cisco has a rare combination of strong margins, mid-teens returns on invested capital, as well as 50% of free cash flow committed to returning to shareholders, and at the same time a low-priced stock.

The Bottom Line

When Cisco comes off its Q4 2019 earnings announcing lackluster Q1 2020 guidance, investors found that its low revenue growth was misaligned with their expectations.

But now that investors have had plenty of time to reflect they should reconsider Cisco's strong shareholder returns, together with a balance sheet which has enough cash to weather numerous storms.

All in all, investors are not being asked to pay much for a steady and predictable growth company, and getting nearly a 3% yield while they wait for the stock to reprice higher.

Cisco is a holding in Jim Cramer'sAction Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells CSCO? Learn more now.