Head-To-Head Survey: Hewlett Packard Enterprise (HPE) and Cisco Systems (CSCO)

Hewlett Packard Enterprise (NYSE: HPE) and Cisco Systems (NASDAQ:CSCO) are both large-cap computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, institutional ownership, dividends, profitability and risk.

Analyst Recommendations

This is a breakdown of recent ratings for Hewlett Packard Enterprise and Cisco Systems, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hewlett Packard Enterprise 2 14 8 0 2.25
Cisco Systems 0 8 22 1 2.77

Hewlett Packard Enterprise presently has a consensus target price of $17.05, indicating a potential upside of 13.80%. Cisco Systems has a consensus target price of $46.44, indicating a potential upside of 8.74%. Given Hewlett Packard Enterprise’s higher possible upside, research analysts plainly believe Hewlett Packard Enterprise is more favorable than Cisco Systems.

Risk and Volatility

Hewlett Packard Enterprise has a beta of 1.77, meaning that its stock price is 77% more volatile than the S&P 500. Comparatively, Cisco Systems has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500.

Earnings and Valuation

This table compares Hewlett Packard Enterprise and Cisco Systems’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hewlett Packard Enterprise $28.87 billion 0.79 $344.00 million $0.96 15.60
Cisco Systems $48.01 billion 4.29 $9.61 billion $2.15 19.87

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

Dividends

Hewlett Packard Enterprise pays an annual dividend of $0.45 per share and has a dividend yield of 3.0%. Cisco Systems pays an annual dividend of $1.32 per share and has a dividend yield of 3.1%. Hewlett Packard Enterprise pays out 46.9% of its earnings in the form of a dividend. Cisco Systems pays out 61.4% 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.

Profitability

This table compares Hewlett Packard Enterprise and Cisco Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hewlett Packard Enterprise 9.36% 8.25% 3.27%
Cisco Systems -2.61% 19.48% 8.87%

Insider and Institutional Ownership

81.6% of Hewlett Packard Enterprise shares are owned by institutional investors. Comparatively, 73.8% of Cisco Systems shares are owned by institutional investors. 1.2% of Hewlett Packard Enterprise shares are owned by company insiders. Comparatively, 0.1% of Cisco Systems shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Cisco Systems beats Hewlett Packard Enterprise on 11 of the 17 factors compared between the two stocks.

About Hewlett Packard Enterprise

Hewlett Packard Enterprise Company provides technology solutions to business and public sector enterprises. It operates through Enterprise Group, Financial Services, and Corporate Investments segments. The Enterprise Group segment offers industry standard servers and mission-critical servers to address the array of its customers' computing needs; converged storage solutions, including 3PAR StoreServ, StoreOnce, and StoreVirtual products, as well as traditional storage solutions, such as tape, storage networking, and legacy external disk products for enterprise and small- and medium-size business; software-defined switches, routers, wireless local area network equipment, network virtualization equipment, security software, location-based services, and network management products; and data center care, proactive care, and technology consulting services, as well as Aruba Services, and communications and media solutions. The Financial Services segment provides leasing, financing, IT consumption and utility programs, and asset management services. The Corporate Investments segment is involved in HP labs and certain cloud-related incubation activities. The company markets and sells its products through resellers, distribution partners, original equipment manufacturers, independent software vendors, systems integrators, and advisory firms. It has a collaboration agreement with ARM and SUSE, as well as the University of Edinburgh, the University of Bristol, and the University of Leicester. Hewlett Packard Enterprise Company is headquartered in Palo Alto, California.

About Cisco Systems

Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol (IP) based networking and other products related to the communications and information technology industry worldwide. The company offers switching products, including fixed-configuration and modular switches, and storage products that provide connectivity to end users, workstations, IP phones, wireless access points, and servers; and next-generation network routing products that interconnect public and private wireline and mobile networks for mobile, data, voice, and video applications. It also provides collaboration products comprising unified communications products, conferencing products, collaboration endpoints, and business messaging products; data center products, such as blade and rack servers, series, fabric interconnects, and management software solutions; wireless products consisting of wireless access points, WLAN controllers, cloud and appliances based services, and integrated software services. In addition, the company offers security products, including network and data center security, advanced threat protection, Web and email security, access and policy, unified threat management, and advisory, integration, and managed services; and other products, such as emerging technologies and other networking products. Further, the company offers a distributed file system for hyperconvergence that enables server-based storage systems; service provider video software and solutions; and technical support services and advanced services. It serves businesses of various sizes, public institutions, governments, and service providers. The company sells its products directly, as well as through channel partners, such as systems integrators, service providers, other resellers, and distributors. The company was founded in 1984 and is headquartered in San Jose, California.

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


Leave a Reply