Cisco Systems vs Alphabet Which Is a Smarter Choice?

Cisco Systems and Alphabet (the parent company of Google) are two tech giants that dominate the market with their cutting-edge technology and innovative solutions. Cisco Systems is a leader in networking and communication technology, while Alphabet is known for its search engine and advertising platforms. Investors often compare the performance of these two companies, analyzing factors such as revenue growth, market share, and future prospects. Both stocks have shown strong potential for growth, making them popular choices among investors.

Cisco Systems or Alphabet?

When comparing Cisco Systems and Alphabet, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Cisco Systems and Alphabet.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Cisco Systems has a dividend yield of 2.7%, while Alphabet has a dividend yield of 0.31%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Cisco Systems reports a 5-year dividend growth of 3.90% year and a payout ratio of 68.09%. On the other hand, Alphabet reports a 5-year dividend growth of 0.00% year and a payout ratio of 5.22%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Cisco Systems P/E ratio at 25.00 and Alphabet's P/E ratio at 25.03. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Cisco Systems P/B ratio is 5.19 while Alphabet's P/B ratio is 7.51.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Cisco Systems has seen a 5-year revenue growth of 0.37%, while Alphabet's is 1.47%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Cisco Systems's ROE at 20.56% and Alphabet's ROE at 31.66%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $58.63 for Cisco Systems and $193.29 for Alphabet. Over the past year, Cisco Systems's prices ranged from $44.50 to $60.23, with a yearly change of 35.35%. Alphabet's prices fluctuated between $131.06 and $196.89, with a yearly change of 50.23%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.