Cisco Systems vs Goldman Sachs Which Is a Smarter Choice?

Cisco Systems and Goldman Sachs are two well-known companies in the financial and technology sectors. Cisco Systems is a global technology leader, specializing in networking hardware, software, and services. On the other hand, Goldman Sachs is a renowned investment banking and financial services firm. Both companies are listed on the stock market, attracting investors seeking opportunities for growth and profitability. This comparison will delve into the performance, financials, and future prospects of Cisco Systems and Goldman Sachs stocks.

Cisco Systems or Goldman Sachs?

When comparing Cisco Systems and Goldman Sachs, 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 Goldman Sachs.

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 2.5%, while Goldman Sachs has a dividend yield of 1.98%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Cisco Systems reports a 5-year dividend growth of 2.87% year and a payout ratio of 69.73%. On the other hand, Goldman Sachs reports a 5-year dividend growth of 22.61% year and a payout ratio of 23.42%.

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 27.72 and Goldman Sachs's P/E ratio at 13.39. 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 5.59 while Goldman Sachs's P/B ratio is 1.57.

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 0.13%, while Goldman Sachs's is 0.77%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Cisco Systems's ROE at 20.19% and Goldman Sachs's ROE at 11.87%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $62.80 for Cisco Systems and $576.78 for Goldman Sachs. Over the past year, Cisco Systems's prices ranged from $44.50 to $66.50, with a yearly change of 49.44%. Goldman Sachs's prices fluctuated between $381.42 and $672.19, with a yearly change of 76.23%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.