Cisco Systems vs Salesforce Which Should You Buy?

Cisco Systems and Salesforce are two leading technology companies with strong positions in the market. Cisco Systems is a multinational corporation that specializes in networking equipment and telecommunications while Salesforce is a cloud-based software company known for its customer relationship management solutions. Both companies have experienced growth and success in recent years, but their stocks have performed differently in the market. In this comparison, we will analyze the performance and outlook of Cisco Systems versus Salesforce stocks.

Cisco Systems or Salesforce?

When comparing Cisco Systems and Salesforce, 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 Salesforce.

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 Salesforce has a dividend yield of 0.34%. 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, Salesforce reports a 5-year dividend growth of 0.00% year and a payout ratio of 14.69%.

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 Salesforce's P/E ratio at 42.75. 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 Salesforce's P/B ratio is 5.74.

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 Salesforce's is 1.16%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Cisco Systems's ROE at 20.56% and Salesforce's ROE at 13.35%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $58.13 for Cisco Systems and $347.43 for Salesforce. Over the past year, Cisco Systems's prices ranged from $44.50 to $60.23, with a yearly change of 35.35%. Salesforce's prices fluctuated between $212.00 and $369.00, with a yearly change of 74.06%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.