SolarWinds vs Cisco Systems Which Is More Profitable?

SolarWinds and Cisco Systems are two tech companies that have been competing in the stock market for several years. SolarWinds specializes in network management software, while Cisco Systems is a multinational technology conglomerate known for its networking hardware and software products. Both companies have experienced fluctuations in their stock prices due to market trends, technological innovations, and industry competition. Investors often compare these two stocks to assess their performance and potential for growth in the ever-evolving tech sector.

SolarWinds or Cisco Systems?

When comparing SolarWinds 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 SolarWinds 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. SolarWinds has a dividend yield of 6.74%, while Cisco Systems has a dividend yield of 2.7%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. SolarWinds reports a 5-year dividend growth of 0.00% year and a payout ratio of 435.01%. 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 SolarWinds P/E ratio at 65.25 and Cisco Systems's P/E ratio at 25.00. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. SolarWinds P/B ratio is 1.85 while Cisco Systems's P/B ratio is 5.19.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, SolarWinds has seen a 5-year revenue growth of -0.61%, while Cisco Systems's is 0.37%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with SolarWinds's ROE at 2.87% 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 $14.60 for SolarWinds and $58.63 for Cisco Systems. Over the past year, SolarWinds's prices ranged from $10.14 to $14.93, with a yearly change of 47.24%. 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.