Cisco Systems vs Microsoft Which Is Superior?

Cisco Systems and Microsoft are two major players in the technology industry, both offering a wide range of products and services to businesses and consumers. When comparing their stocks, investors often consider factors such as financial performance, market share, and future growth potential. Cisco Systems is known for its networking hardware and software solutions, while Microsoft is a powerhouse in the software and cloud computing sectors. Both companies have a strong track record of success, but their stocks can behave differently in response to market trends and economic conditions.

Cisco Systems or Microsoft?

When comparing Cisco Systems and Microsoft, 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 Microsoft.

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 Microsoft has a dividend yield of 0.69%. 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, Microsoft reports a 5-year dividend growth of 10.16% year and a payout ratio of 24.63%.

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 Microsoft's P/E ratio at 36.92. 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 Microsoft's P/B ratio is 11.61.

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 Microsoft's is 0.99%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Cisco Systems's ROE at 20.56% and Microsoft's ROE at 34.56%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $58.63 for Cisco Systems and $449.11 for Microsoft. Over the past year, Cisco Systems's prices ranged from $44.50 to $60.23, with a yearly change of 35.35%. Microsoft's prices fluctuated between $364.13 and $468.35, with a yearly change of 28.62%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.