Cisco Systems vs Netflix Which Is Superior?

Cisco Systems and Netflix are two tech giants in the stock market, each with their own unique strengths and weaknesses. Cisco, a global leader in networking equipment, has a long history of consistent revenues and profitability. On the other hand, Netflix, a dominant player in the streaming industry, has seen explosive growth in subscribers and revenue in recent years. Investors may be drawn to Cisco's stability or Netflix's potential for continued expansion, but both stocks offer opportunities for growth in the ever-changing tech landscape.

Cisco Systems or Netflix?

When comparing Cisco Systems and Netflix, 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 Netflix.

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 Netflix 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, Netflix 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 25.00 and Netflix's P/E ratio at 50.94. 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 Netflix's P/B ratio is 17.44.

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 Netflix's is 1.11%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Cisco Systems's ROE at 20.56% and Netflix's ROE at 35.86%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $58.63 for Cisco Systems and $922.60 for Netflix. Over the past year, Cisco Systems's prices ranged from $44.50 to $60.23, with a yearly change of 35.35%. Netflix's prices fluctuated between $461.86 and $941.75, with a yearly change of 103.90%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.