Nokia vs Cisco Systems

Nokia and Cisco Systems are two leading companies in the telecommunications industry, both offering a wide range of products and services. While both companies have seen fluctuations in their stock prices over the years, they have also shown resilience and innovation in adapting to market trends. Investors looking to capitalize on the growth potential of the tech sector may consider investing in Nokia or Cisco Systems stocks. In this analysis, we will compare and contrast the performance and prospects of these two companies to help investors make informed decisions.

Nokia or Cisco Systems?

When comparing Nokia 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 Nokia 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. Nokia has a dividend yield of 3.16%, while Cisco Systems has a dividend yield of 2.94%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Nokia reports a 5-year dividend growth of 0.00% year and a payout ratio of 189.95%. On the other hand, Cisco Systems reports a 5-year dividend growth of 3.90% year and a payout ratio of 61.86%.

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 Nokia P/E ratio at 59.06 and Cisco Systems's P/E ratio at 21.06. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Nokia P/B ratio is 1.07 while Cisco Systems's P/B ratio is 4.78.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Nokia has seen a 5-year revenue growth of -0.02%, while Cisco Systems's is 0.37%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Nokia's ROE at 1.80% and Cisco Systems's ROE at 22.60%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $4.38 for Nokia and $53.92 for Cisco Systems. Over the past year, Nokia's prices ranged from $2.94 to $4.52, with a yearly change of 53.74%. Cisco Systems's prices fluctuated between $44.50 and $54.61, with a yearly change of 22.71%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.