Cisco Systems vs Palo Alto Networks Which Performs Better?

Cisco Systems and Palo Alto Networks are two prominent players in the cybersecurity and networking industry. While Cisco Systems has established itself as a giant in the networking space, Palo Alto Networks has gained recognition for its advanced cybersecurity solutions. Both companies have experienced growth in recent years, but their stocks have shown differing performances. Investors are closely monitoring their financial results, market share, and competitive strategies to determine which stock offers better opportunities for growth and profitability in the long term.

Cisco Systems or Palo Alto Networks?

When comparing Cisco Systems and Palo Alto Networks, 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 Palo Alto Networks.

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 2.77%, while Palo Alto Networks 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, Palo Alto Networks 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 24.41 and Palo Alto Networks's P/E ratio at 53.13. 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 5.06 while Palo Alto Networks's P/B ratio is 26.49.

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 Palo Alto Networks's is 1.75%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Cisco Systems's ROE at 20.56% and Palo Alto Networks's ROE at 63.78%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $57.23 for Cisco Systems and $385.57 for Palo Alto Networks. Over the past year, Cisco Systems's prices ranged from $44.50 to $59.38, with a yearly change of 33.44%. Palo Alto Networks's prices fluctuated between $242.98 and $408.53, with a yearly change of 68.13%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.