Cisco Systems vs SAP Which Is More Attractive?

Cisco Systems and SAP are two leading companies in the technology industry, each with a strong presence in the market. Cisco Systems is known for its networking solutions, while SAP is renowned for its enterprise software applications. Both companies have seen fluctuations in their stock prices over the years, with investors closely monitoring their performance. This comparison will delve into the financial aspects of Cisco Systems and SAP stocks, analyzing their growth potential and key factors influencing their market value.

Cisco Systems or SAP?

When comparing Cisco Systems and SAP, 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 SAP.

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 SAP has a dividend yield of 0.98%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Cisco Systems reports a 5-year dividend growth of 3.90% year and a payout ratio of 68.09%. On the other hand, SAP reports a 5-year dividend growth of 6.69% year and a payout ratio of 90.44%.

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 SAP's P/E ratio at 99.59. 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 SAP's P/B ratio is 6.85.

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 SAP's is -0.21%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Cisco Systems's ROE at 20.56% and SAP's ROE at 6.71%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $58.63 for Cisco Systems and $250.63 for SAP. Over the past year, Cisco Systems's prices ranged from $44.50 to $60.23, with a yearly change of 35.35%. SAP's prices fluctuated between $148.38 and $256.13, with a yearly change of 72.62%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.