Better Buy: Cisco Systems vs. Oracle

In contrast with many high-growth cloud-based tech stocks, Cisco Systems (NASDAQ: CSCO) and Oracle (NYSE: ORCL) have been posting low- to mid-single-digit revenue growth over the last few quarters. Both giant tech companies are transforming their legacy on-premises businesses to adapt to the shift to cloud computing.

But thanks to their large scale, they have been generating enormous free cash flow that allows them to pay a dividend and buy back shares. Besides these similarities, Cisco's competitiveness seems stronger given its dominant position in its markets and its solid balance sheet. Yet the market values Cisco at a small discount to Oracle.

Cisco has been dominating the network equipment market with its switches and routers over the last couple of decades. But with the development of cloud computing, the company had to update its portfolio.

Source Fool.com