Fortinet vs Cisco Systems Which Is a Better Investment?

Fortinet and Cisco Systems are two leading companies in the cybersecurity and networking industry. Fortinet is known for its strong presence in cybersecurity solutions, offering advanced threat prevention and network security services. On the other hand, Cisco Systems is a prominent player in networking hardware and software, providing a wide range of networking solutions for businesses. Both companies have shown growth potential in the market, making their stocks highly attractive to investors looking to capitalize on the increasing demand for cybersecurity and networking technologies.

Fortinet or Cisco Systems?

When comparing Fortinet and Cisco Systems, 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 Fortinet and Cisco Systems.

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. Fortinet has a dividend yield of -%, while Cisco Systems has a dividend yield of 2.5%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Fortinet reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, Cisco Systems reports a 5-year dividend growth of 2.87% year and a payout ratio of 69.73%.

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 Fortinet P/E ratio at 46.91 and Cisco Systems's P/E ratio at 27.72. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Fortinet P/B ratio is 54.80 while Cisco Systems's P/B ratio is 5.59.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Fortinet has seen a 5-year revenue growth of 2.09%, while Cisco Systems's is 0.13%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Fortinet's ROE at 273.48% and Cisco Systems's ROE at 20.19%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $103.72 for Fortinet and $62.80 for Cisco Systems. Over the past year, Fortinet's prices ranged from $54.57 to $114.82, with a yearly change of 110.41%. Cisco Systems's prices fluctuated between $44.50 and $66.50, with a yearly change of 49.44%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.