Cisco Systems vs Zscaler Which Should You Buy?

Cisco Systems and Zscaler are two prominent players in the cybersecurity industry, each offering a unique set of products and services to address the growing demand for online security. Cisco, a long-standing leader in networking and IT infrastructure, has expanded its portfolio to include advanced security solutions. Zscaler, a newer entrant to the market, specializes in cloud-based security offerings. Investors looking to capitalize on the increasing importance of cybersecurity may consider these two stocks for their investment portfolios.

Cisco Systems or Zscaler?

When comparing Cisco Systems and Zscaler, 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 Zscaler.

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 Zscaler 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 61.86%. On the other hand, Zscaler 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 22.83 and Zscaler's P/E ratio at -523.86. 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 5.18 while Zscaler's P/B ratio is 23.73.

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 Zscaler's is 2.75%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Cisco Systems's ROE at 22.60% and Zscaler's ROE at -5.58%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $58.36 for Cisco Systems and $195.05 for Zscaler. Over the past year, Cisco Systems's prices ranged from $44.50 to $59.38, with a yearly change of 33.44%. Zscaler's prices fluctuated between $153.45 and $259.61, with a yearly change of 69.18%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.