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

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ixia N/A N/A N/A ($0.41) -47.93
Cisco Systems $48.01 billion 4.15 $9.61 billion $1.93 20.90

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

Institutional & Insider Ownership

63.6% of Ixia shares are owned by institutional investors. Comparatively, 75.6% of Cisco Systems shares are owned by institutional investors. 24.4% of Ixia 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 large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ixia 0 1 0 0 2.00
Cisco Systems 0 12 20 0 2.63

Ixia currently has a consensus price target of $19.65, suggesting a potential upside of 0.00%. Cisco Systems has a consensus price target of $39.10, suggesting a potential downside of 3.07%. Given Ixia’s higher probable upside, analysts clearly believe Ixia is more favorable than Cisco Systems.

Dividends

Cisco Systems pays an annual dividend of $1.16 per share and has a dividend yield of 2.9%. Ixia does not pay a dividend. Cisco Systems pays out 60.1% of its earnings in the form of a dividend.

Profitability

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

Net Margins Return on Equity Return on Assets
Ixia -29.28% -28.71% -19.71%
Cisco Systems 20.26% 16.64% 8.47%

Summary

Cisco Systems beats Ixia on 10 of the 13 factors compared between the two stocks.

About Ixia

Ixia is a provider of physical and virtual network application performance and security resilience solutions. The Company’s product solutions consist of its hardware platforms, software applications and services, including warranty and maintenance offerings. The Company helps its customers to validate the performance and security resilience of their applications and networks. The Company offers network test hardware platforms with interchangeable interfaces, using a common set of applications and Application Programing Interfaces (APIs). The Company provides its solutions to network equipment manufacturers (NEMs), service providers, and enterprise and government organizations. The Company’s product solutions consist of its hardware platforms, such as chassis, interface cards and appliances, software application tools, and services, including its warranty and maintenance offerings and professional services.

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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