SAP vs Cisco Systems Which Is More Promising?

SAP and Cisco Systems are two leading technology companies with strong reputations in the market. Both companies are highly regarded for their innovation, product quality, and strong financial performance. SAP specializes in enterprise software solutions, while Cisco Systems focuses on networking equipment and services. Investors looking to diversify their portfolio with technology stocks may consider these two industry giants. By analyzing the historical performance, future growth prospects, and market trends, investors can make informed decisions on whether to invest in SAP or Cisco Systems stocks.

SAP or Cisco Systems?

When comparing SAP 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 SAP 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. SAP has a dividend yield of 0.97%, 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. SAP reports a 5-year dividend growth of 6.69% year and a payout ratio of 90.44%. 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 SAP P/E ratio at 99.14 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. SAP P/B ratio is 6.82 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, SAP has seen a 5-year revenue growth of -0.21%, while Cisco Systems's is 0.37%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with SAP's ROE at 6.71% 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 $251.53 for SAP and $58.38 for Cisco Systems. Over the past year, SAP's prices ranged from $148.38 to $256.13, with a yearly change of 72.62%. 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.