Cisco Systems, Inc. (CSCO) vs Ericsson (ERIC)

Cisco Systems, Inc. and Ericsson are both Communication Equipment companies. Cisco Systems, Inc. is the larger, with a market value of $422.0B against $29.4B — 14.4× the size. Ericsson trades at the lower P/E: 12.2× against 31.8×. Cisco Systems, Inc. grew revenue faster over the last twelve months: 11.8% against 2.26%. Cisco Systems, Inc. has the higher net margin (21.0% vs 10.6%) and the lower return on invested capital (17.9% vs 25.1%). Both pay a dividend; Ericsson yields more (4.83% vs 3.15%). Across the 23 metrics below, Ericsson leads on 14 and Cisco Systems, Inc. on 9.

Valuation

Metric CSCO ERIC Communication Equipment median
P/E 31.84 12.22 33.61
P/S 6.66 1.30 2.16
P/B 8.39 2.80 2.40
Price to free cash flow 33.03 10.24 25.02
EV/EBITDA 23.74 6.70 13.78
EV/Sales 6.71 1.20 2.27
Earnings yield 3.14% 8.18% (0.65%)
Free cash flow yield 3.03% 9.77% 1.61%

Profitability

Metric CSCO ERIC Communication Equipment median
Gross margin 64.52% 46.99% 39.47%
Operating margin 24.27% 14.52% 2.39%
Net margin 20.95% 10.61% (0.74%)
Free cash flow margin 20.16% 12.72% 1.39%
Return on equity 27.32% 0.00% (1.91%)
Return on assets 10.53% 8.76% (0.20%)
Return on invested capital 17.87% 25.09% 0.72%

Growth

Metric CSCO ERIC Communication Equipment median
Revenue growth (TTM) 11.77% 2.26% 11.48%
EPS growth (last fiscal year) 27.59% 0.00% —
Revenue growth, 5-year CAGR 4.92% (0.92%) 4.92%
Net income growth, 5-year CAGR 4.61% 8.80% 0.00%

Health

Metric CSCO ERIC Communication Equipment median
Debt to equity 0.39 0.30 0.06
Current ratio 0.93 1.12 2.01
Net debt to EBITDA 0.19 (0.50) 0.67

Dividend

Metric CSCO ERIC Communication Equipment median
Dividend yield 3.15% 4.83% 2.63%
Payout ratio 0.50 0.72 0.00

Size

Metric CSCO ERIC Communication Equipment median
Market cap 422.01b 29.36b 563.45m

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