Finisar (NASDAQ: FNSR) and Cisco Systems (NASDAQ:CSCO) are both mid-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, valuation, institutional ownership, analyst recommendations, earnings, risk and dividends.
This table compares Finisar and Cisco Systems’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This table compares Finisar and Cisco Systems’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Finisar||$1.45 billion||1.51||$249.34 million||$2.13||9.04|
|Cisco Systems||$48.01 billion||3.87||$9.61 billion||$1.93||19.48|
Cisco Systems has higher revenue and earnings than Finisar. Finisar is trading at a lower price-to-earnings ratio than Cisco Systems, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Finisar has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500. Comparatively, Cisco Systems has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500.
Cisco Systems pays an annual dividend of $1.16 per share and has a dividend yield of 3.1%. Finisar does not pay a dividend. Cisco Systems pays out 60.1% of its earnings in the form of a dividend.
This is a breakdown of recent recommendations and price targets for Finisar and Cisco Systems, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Finisar currently has a consensus price target of $31.35, indicating a potential upside of 62.75%. Cisco Systems has a consensus price target of $36.75, indicating a potential downside of 2.26%. Given Finisar’s stronger consensus rating and higher probable upside, research analysts clearly believe Finisar is more favorable than Cisco Systems.
Institutional and Insider Ownership
91.4% of Finisar shares are held by institutional investors. Comparatively, 75.7% of Cisco Systems shares are held by institutional investors. 1.0% of Finisar shares are held by insiders. Comparatively, 0.1% of Cisco Systems shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Cisco Systems beats Finisar on 10 of the 17 factors compared between the two stocks.
Finisar Company Profile
Finisar Corporation (Finisar) is a provider of optical subsystems and components that are used in data communication and telecommunication applications. The Company’s optical subsystems consist of transmitters, receivers, transceivers, transponders and active optical cables, which provide the fundamental optical-electrical or optoelectronic interface for interconnecting the electronic equipment used in these networks, including the switches, routers, and servers used in wireline networks. These products rely on the use of semiconductor lasers and photodetectors in conjunction with integrated circuits and optoelectronic packaging to provide a means for transmitting and receiving digital signals over fiber optic cable at speeds ranging from less than one gigabit per second (Gbps), to more than 100 Gbps, over distances of less than 10 meters to more than 2,000 kilometers, using a range of network protocols and physical configurations.
Cisco Systems Company Profile
Cisco Systems, Inc. designs and sells a range of products, provides services and delivers integrated solutions to develop and connect networks around the world. The Company operates through three geographic segments: Americas; Europe, the Middle East and Africa (EMEA), and Asia Pacific, Japan and China (APJC). The Company groups its products and technologies into various categories, such as Switching; Next-Generation Network (NGN) Routing; Collaboration; Data Center; Wireless; Service Provider Video; Security, and Other Products. In addition to its product offerings, the Company provides a range of service offerings, including technical support services and advanced services. The Company delivers its technology and services to its customers as solutions for their priorities, including cloud, video, mobility, security, collaboration and analytics. The Company serves customers, including businesses of all sizes, public institutions, governments and service providers.
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