Palo Alto Networks vs Cisco Systems Which Offers More Value?

Palo Alto Networks and Cisco Systems are two prominent companies in the cybersecurity industry, both offering cutting-edge solutions to protect organizations from cyber threats. Investors looking to capitalize on the growing demand for cybersecurity products and services may consider investing in either Palo Alto Networks or Cisco Systems stocks. Palo Alto Networks has shown strong growth in recent years, while Cisco Systems has a long-standing reputation and a diverse portfolio of products. Understanding the strengths and weaknesses of each company is crucial for making informed investment decisions in the cybersecurity sector.

Palo Alto Networks or Cisco Systems?

When comparing Palo Alto Networks 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 Palo Alto Networks 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. Palo Alto Networks has a dividend yield of -%, while Cisco Systems has a dividend yield of 2.71%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Palo Alto Networks 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 3.90% year and a payout ratio of 68.09%.

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 Palo Alto Networks P/E ratio at 46.99 and Cisco Systems's P/E ratio at 24.90. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Palo Alto Networks P/B ratio is 21.73 while Cisco Systems's P/B ratio is 5.17.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Palo Alto Networks has seen a 5-year revenue growth of 1.75%, while Cisco Systems's is 0.37%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Palo Alto Networks's ROE at 54.94% and Cisco Systems's ROE at 20.56%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $392.36 for Palo Alto Networks and $58.38 for Cisco Systems. Over the past year, Palo Alto Networks's prices ranged from $260.09 to $410.23, with a yearly change of 57.73%. Cisco Systems's prices fluctuated between $44.50 and $60.23, with a yearly change of 35.35%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.