Cisco Systems vs Telefonaktiebolaget LM Ericsson Which Is a Better Investment?

Cisco Systems and Telefonaktiebolaget LM Ericsson are two of the biggest players in the telecommunications equipment industry. Both companies provide networking solutions and technology services to businesses and consumers worldwide. Cisco is known for its strength in networking hardware and software, while Ericsson is a major player in telecommunications infrastructure. Investors often compare the stocks of these two companies to determine which may be a better investment opportunity. By analyzing their financial performance, market trends, and competitive strengths, investors can make informed decisions about buying or selling Cisco Systems vs. Telefonaktiebolaget LM Ericsson stocks.

Cisco Systems or Telefonaktiebolaget LM Ericsson?

When comparing Cisco Systems and Telefonaktiebolaget LM Ericsson, 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 Telefonaktiebolaget LM Ericsson.

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 Telefonaktiebolaget LM Ericsson has a dividend yield of 3.3%. 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, Telefonaktiebolaget LM Ericsson reports a 5-year dividend growth of 9.81% year and a payout ratio of -667.40%.

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 24.90 and Telefonaktiebolaget LM Ericsson's P/E ratio at -222.39. 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 Telefonaktiebolaget LM Ericsson's P/B ratio is 3.50.

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 Telefonaktiebolaget LM Ericsson's is 0.23%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Cisco Systems's ROE at 20.56% and Telefonaktiebolaget LM Ericsson's ROE at -1.44%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $58.38 for Cisco Systems and $8.25 for Telefonaktiebolaget LM Ericsson. Over the past year, Cisco Systems's prices ranged from $44.50 to $60.23, with a yearly change of 35.35%. Telefonaktiebolaget LM Ericsson's prices fluctuated between $4.77 and $8.62, with a yearly change of 80.71%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.