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

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
XG Technology 0 0 2 0 3.00
Cisco Systems 0 11 20 0 2.65

XG Technology currently has a consensus price target of $3.75, indicating a potential upside of 125.90%. Cisco Systems has a consensus price target of $35.56, indicating a potential upside of 9.61%. Given XG Technology’s stronger consensus rating and higher possible upside, research analysts plainly believe XG Technology is more favorable than Cisco Systems.

Dividends

Cisco Systems pays an annual dividend of $1.16 per share and has a dividend yield of 3.6%. XG Technology does not pay a dividend. Cisco Systems pays out 60.7% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares XG Technology and Cisco Systems’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
XG Technology $27.54 million 0.70 -$14.61 million N/A N/A
Cisco Systems $48.01 billion 3.35 $14.83 billion $1.91 16.98

Cisco Systems has higher revenue and earnings than XG Technology.

Profitability

This table compares XG Technology and Cisco Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
XG Technology -18.20% -19.60% -11.48%
Cisco Systems 20.02% 16.91% 8.61%

Volatility & Risk

XG Technology has a beta of -0.83, meaning that its share price is 183% less volatile than the S&P 500. Comparatively, Cisco Systems has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500.

Institutional & Insider Ownership

2.3% of XG Technology shares are held by institutional investors. Comparatively, 75.4% of Cisco Systems shares are held by institutional investors. 2.8% of XG Technology 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, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Cisco Systems beats XG Technology on 10 of the 14 factors compared between the two stocks.

About XG Technology

xG Technology, Inc. develops a portfolio of intellectual property, which is embedded in its software algorithms that offer cognitive interference mitigation and spectrum access solutions for a range of applications using commercial off the shelf devices. The Company is a provider of wireless video solutions to broadcast, law enforcement and defense markets, and private mobile broadband networks for use in a range of environments. The Company markets its technology solutions across three business units: Integrated Microwave Technologies (IMT), Vislink Communication Systems and xMax. The Company offers a range of frequency-agnostic cognitive radio solutions. It focuses on various industries across the world, such as telecommunications, cable, defense and public safety, municipal governments, critical infrastructure and markets ranging from rural to urban areas and expeditionary deployments.

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.

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