Financial Comparison: Cisco Systems (CSCO) vs. West (WSTC)

Cisco Systems (NASDAQ: CSCO) and West (NASDAQ:WSTC) are both technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, earnings, valuation and risk.

Dividends

Cisco Systems pays an annual dividend of $1.16 per share and has a dividend yield of 3.0%. West pays an annual dividend of $0.45 per share and has a dividend yield of 1.9%. Cisco Systems pays out 60.1% of its earnings in the form of a dividend. West pays out 17.9% 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.

Earnings and Valuation

This table compares Cisco Systems and West’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cisco Systems $48.01 billion 3.99 $9.61 billion $1.93 20.09
West N/A N/A N/A $2.52 9.33

Cisco Systems has higher revenue and earnings than West. West is trading at a lower price-to-earnings ratio than Cisco Systems, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations for Cisco Systems and West, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cisco Systems 0 12 20 0 2.63
West 0 4 0 0 2.00

Cisco Systems currently has a consensus price target of $39.10, suggesting a potential upside of 0.86%. West has a consensus price target of $23.75, suggesting a potential upside of 1.06%. Given West’s higher probable upside, analysts clearly believe West is more favorable than Cisco Systems.

Profitability

This table compares Cisco Systems and West’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cisco Systems 20.26% 16.64% 8.47%
West 7.79% N/A 5.18%

Insider & Institutional Ownership

75.6% of Cisco Systems shares are owned by institutional investors. Comparatively, 67.4% of West shares are owned by institutional investors. 0.1% of Cisco Systems shares are owned by insiders. Comparatively, 4.6% of West shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Cisco Systems beats West on 9 of the 13 factors compared between the two stocks.

About Cisco Systems

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.

About West

West Corporation is a provider of communication and network infrastructure services. The Company helps its clients communicate, collaborate and connect with their audiences through a portfolio of solutions that include unified communications services, safety services, and interactive services, such as automated notifications, specialized agent services and telecom services. The Company’s segments include Unified Communications Services, which includes collaboration services, Unified Communications as a Service (UCaaS) and telecom services; Safety Services, which includes carrier services, government solutions and advanced services; Interactive Services, including outbound (proactive notifications-voice, text/short messaging service (SMS) and chat), inbound speech solutions (interactive voice response or IVR), Web, mobile and professional services, and Specialized Agent Services, which includes healthcare advocacy services, cost management services and revenue generation.

Receive News & Ratings for Cisco Systems Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Cisco Systems and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply