Financial Comparison: Clearfield (NASDAQ:CLFD) and Cisco Systems (NASDAQ:CSCO)

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

Earnings and Valuation

This table compares Cisco Systems and Clearfield”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cisco Systems	$63.33 billion	6.80	$13.27 billion	$3.34	32.72
Clearfield	$150.13 million	2.76	-$8.05 million	($0.51)	-59.83

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

Insider and Institutional Ownership

73.3% of Cisco Systems shares are owned by institutional investors. Comparatively, 88.7% of Clearfield shares are owned by institutional investors. 0.0% of Cisco Systems shares are owned by insiders. Comparatively, 17.8% of Clearfield shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Cisco Systems and Clearfield, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cisco Systems	0	7	16	2	2.80
Clearfield	1	1	5	0	2.57

Cisco Systems currently has a consensus target price of $129.68, indicating a potential upside of 18.68%. Clearfield has a consensus target price of $41.75, indicating a potential upside of 36.82%. Given Clearfield’s higher possible upside, analysts plainly believe Clearfield is more favorable than Cisco Systems.

Risk and Volatility

Cisco Systems has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.Comparatively, Clearfield has a beta of 2.11, suggesting that its stock price is 111% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Cisco Systems	20.95%	30.16%	11.69%
Clearfield	-4.71%	1.61%	1.45%

Summary

Cisco Systems beats Clearfield on 11 of the 15 factors compared between the two stocks.

About Cisco Systems

Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol based networking and other products related to the communications and information technology industry in the Americas, Europe, the Middle East, Africa, the Asia Pacific, Japan, and China. The company also offers switching portfolio encompasses campus switching as well as data center switching; enterprise routing portfolio interconnects public and private wireline and mobile networks, delivering highly secure, and reliable connectivity to campus, data center and branch networks; wireless products include wireless access points and controllers; and compute portfolio including the cisco unified computing system, hyperflex, and software management capabilities, which combine computing, networking, and storage infrastructure management and virtualization. In addition, it provides Internet for the future product consists of routed optical networking, 5G, silicon, and optics solutions; collaboration products, such as meetings, collaboration devices, calling, contact center, and communication platform as a service; end-to-end security product consists of network security, cloud security, security endpoints, unified threat management, and zero trust; and optimized application experiences products including full stack observability and network assurance. Further, the company offers a range of service and support options for its customers, including technical support and advanced services and advisory services. It serves businesses of various sizes, public institutions, governments, and service providers. The company sells its products and services directly, as well as through systems integrators, service providers, other resellers, and distributors. Cisco Systems, Inc. has strategic alliances with other companies. Cisco Systems, Inc. was incorporated in 1984 and is headquartered in San Jose, California.

About Clearfield

Clearfield, Inc. manufactures and sells various fiber connectivity products in the United States and internationally. The company offers FieldSmart, a series of panels, cabinets, wall boxes, and other enclosures; WaveSmart, an optical components integrated for signal coupling, splitting, termination, multiplexing, demultiplexing, and attenuation for integration within its fiber management platform; and active cabinet products. It also provides CraftSmart FiberFirst pedestals, an access terminal that offers a cable management and mounting bracket kit to support the deployment of access terminals; YOURx, an access terminal that provides flexibility with cable mid-span and internal splicing options; and FieldShield, a fiber pathway and protection method for reducing the cost of broadband deployment. In addition, the company offers fiber assemblies; fiber optic and copper cables, microducts, microduct accessories, and tools; and installation and connection accessories for fiber optic networks. It serves community broadband customers, multiple system operators, large regional service providers, and wireline/wireless national telco carriers. The company was formerly known as APA Enterprises, Inc. and changed its name to Clearfield, Inc. in January 2008. Clearfield, Inc. was incorpoarted in 1979 and is headquartered in Minneapolis, Minnesota.