Cisco Systems (NASDAQ:CSCO) and Motorola Solutions (NYSE:MSI) are both large-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, earnings, profitability and valuation.
Analyst Ratings
This is a summary of recent ratings and price targets for Cisco Systems and Motorola Solutions, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Cisco Systems | 0 | 15 | 9 | 0 | 2.38 |
Motorola Solutions | 1 | 2 | 13 | 0 | 2.75 |
Cisco Systems currently has a consensus target price of $47.4348, suggesting a potential upside of 4.41%. Motorola Solutions has a consensus target price of $152.5714, suggesting a potential downside of 12.09%. Given Cisco Systems' higher possible upside, research analysts clearly believe Cisco Systems is more favorable than Motorola Solutions.
Institutional & Insider Ownership
70.6% of Cisco Systems shares are held by institutional investors. Comparatively, 86.6% of Motorola Solutions shares are held by institutional investors. 0.0% of Cisco Systems shares are held by insiders. Comparatively, 2.3% of Motorola Solutions shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Risk & Volatility
Cisco Systems has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500. Comparatively, Motorola Solutions has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500.
Earnings & Valuation
This table compares Cisco Systems and Motorola Solutions' revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Cisco Systems | $49.30 billion | 3.89 | $11.21 billion | $2.92 | 15.56 |
Motorola Solutions | $7.89 billion | 3.73 | $868 million | $7.44 | 23.33 |
Cisco Systems has higher revenue and earnings than Motorola Solutions. Cisco Systems is trading at a lower price-to-earnings ratio than Motorola Solutions, indicating that it is currently the more affordable of the two stocks.
Dividends
Cisco Systems pays an annual dividend of $1.44 per share and has a dividend yield of 3.2%. Motorola Solutions pays an annual dividend of $2.84 per share and has a dividend yield of 1.6%. Cisco Systems pays out 49.3% of its earnings in the form of a dividend. Motorola Solutions pays out 38.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Cisco Systems has raised its dividend for 7 consecutive years and Motorola Solutions has raised its dividend for 1 consecutive years. Cisco Systems is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares Cisco Systems and Motorola Solutions' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Cisco Systems | 21.76% | 32.64% | 12.94% |
Motorola Solutions | 10.39% | -158.99% | 11.97% |
Summary
Cisco Systems beats Motorola Solutions on 10 of the 17 factors compared between the two stocks.