Is Cisco Systems (CSCO) management following the Carl Icahn plan? It may be looking at what the famous hedge-fund raider has been up to at Apple (AAPL), as he has called for more share buybacks and dividends. Cisco announced last night that it will increase its dividend by 12%, or two cents per share, now paying out a yield of 3.3.%. It also continue to scarf up it's own stock, having repurchased $4 billion worth of stock -- or 185 million shares -- in the quarter.

The dividend boost and large buyback came as a surprise. But it all makes sense, as what else is Cisco to do? Growth has dried up. With cash piling up on the balance sheet and it's growth prospects cloudy for the next year, Cisco is trying to keep shareholders happy by directing its cash toward a dividend and buybacks. Perhaps Cisco CEO John Chambers feels Captain Carl may prey on him next.

Cisco reported second quarter of fiscal year 2014 sales of $11.16 billion, close to consensus estimates. It reported earnings per share of $0.47, exceeding $0.46 consenus estimate by a penny, aided by lower expenses and a lower share count, helped by the buyback.

Yet despite these okay numbers, Cisco shares are trading down about 4% today, last trading hands around $22.

Cisco officials forecast revenue declines of 6-8% for they year. It reiterated fiscal year 2014 earnings of $1.95-2.05.

Analysts seemed to take the “cautious optimism” approach to Cisco. After the last quarter's disaster, this earnings report was more muted, with a focus on the investor with the dividend and the buyback.

“The giant share buy-backs and dividend boost were unanticipated with the company returning much of the free cash flow to investors,” wrote Raymond James Managing Director Simon Leopold in a research note this morning. “The better-than-consensus sales coupled with in-line guidance will come as a relief.”

Yet, investors sold. Perhaps because they see the buyback boost and dividend increase as a sign of defeat, that Cisco is admitting it's not a growth company anymore.

Some analysts are still optimistic that growth can pick up later in the year. Leopold says there are signs of strength in the US. “Commercial and Enterprise verticals held up with strength in the U.S. Services gross margin hit a multi-year high of 69.2% vs. 66.6% last quarter,” he wrote. “Book to bill exceeded 1 with very strong orders.”

There's also the low valuation. Cisco has become a cheap stock, now trading with a price/earnings ratio of about 11, so selling should be muted in the low $20s with the 3.3% yield now supporting shares, paying more than the 10-year Treasury.

(Disclosure: Long AAPL; no position in CSCO.)