Salesforce vs Cisco Systems

Salesforce and Cisco Systems are two well-known tech companies that are often compared in the stock market. Salesforce is a cloud-based software company known for its customer relationship management (CRM) solutions, while Cisco Systems is a networking hardware and telecommunications equipment company. Both companies have shown strong growth in recent years, but their stock performance can vary based on market trends and company-specific factors. Investors looking to diversify their portfolios may consider comparing the performance of Salesforce and Cisco Systems stocks.

Salesforce or Cisco Systems?

When comparing Salesforce 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 Salesforce 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. Salesforce has a dividend yield of 0.42%, 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. Salesforce reports a 5-year dividend growth of 0.00% year and a payout ratio of 13.71%. 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 Salesforce P/E ratio at 49.36 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. Salesforce P/B ratio is 4.82 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, Salesforce has seen a 5-year revenue growth of 1.16%, while Cisco Systems's is 0.37%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Salesforce's ROE at 9.58% 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 $288.00 for Salesforce and $53.92 for Cisco Systems. Over the past year, Salesforce's prices ranged from $193.68 to $318.71, with a yearly change of 64.55%. 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.