Cisco Systems vs Ciena Which Is a Smarter Choice?

Cisco Systems and Ciena are two leading companies in the telecommunications industry, but they have taken divergent paths in recent years. Cisco, a long-established player in networking hardware, has faced challenges in maintaining growth and relevance in a rapidly changing technological landscape. In contrast, Ciena, a specialist in optical networking solutions, has shown impressive growth and innovation in its niche market. Investors looking to capitalize on these differences may find opportunities for growth and stability in both companies' stocks.

Cisco Systems or Ciena?

When comparing Cisco Systems and Ciena, 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 Ciena.

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 2.71%, while Ciena has a dividend yield of -%. 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, Ciena reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%.

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 24.94 and Ciena's P/E ratio at 74.10. 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 5.17 while Ciena's P/B ratio is 3.54.

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 Ciena's is 0.32%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Cisco Systems's ROE at 20.56% and Ciena's ROE at 4.79%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $58.13 for Cisco Systems and $70.60 for Ciena. Over the past year, Cisco Systems's prices ranged from $44.50 to $60.23, with a yearly change of 35.35%. Ciena's prices fluctuated between $42.20 and $75.11, with a yearly change of 77.99%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.