Another top technology stock, Cisco Systems Inc. (NASDAQ: CSCO) trades at a low 13.3 estimated 2015 earnings and boasts an outstanding 7.44 free cash flow yield. The networking giant also seems to have fought through numerous headwinds, including up and down demand from telecom carriers, weakness in emerging markets and threats to its very lucrative switching business, all of which many top analysts feel are going away. The company also stands to benefit from a better corporate spending environment in Europe, as well as continued growth at home.
Cisco recently won an important contract for the Verizon build-out of the company’s next-generation 100G metro network. While Cisco’s optical business is small as a part of total revenue, this win is seen by Wall Street as a significant endorsement of the investments Cisco has made into its optics business.
After 20 year of leading the Silicon Valley giant, John Chambers recently announced that Chuck Robbins will become the next chief executive of the world’s biggest networking equipment company when he steps down as CEO. The company also will announce earnings this week, along with other closely watched tech companies.
Cisco investors are paid a very solid 2.9% dividend. Oppenheimer has a $32 target for the stock, and the consensus target is posted at $30.21. Shares closed Friday at $29.23.
Large employee layoffs last summer dented the balance sheet and Juniper Networks Inc. (NYSE: JNPR) has been fighting its way back ever since. Positive activist shareholders moves combined with a solid product cycle have made the stock a recent favorite, so the trip to the woodshed last year may be just the ticket for investors looking to buy some. The company has a big presence in network and enterprise security and could possibly be a merger or straight out takeover target.
Juniper and Mirantis recently announced an expanded engineering partnership that provides customers with a reliable, open-source software-defined networking fabric to deploy OpenStack clouds at scale. According to a report by 451 Research, the OpenStack market size is estimated to reach $1.7 billion by 2016. Enterprises and service providers are increasingly looking to open-source software for its increased flexibility, cost savings, no vendor lock-in and the ability to customize integration with other infrastructure and applications.
Juniper Networks investors are paid a 1.5% dividend. The Oppenheimer price objective is $29, and consensus target is much lower at $25.56. The stock closed Friday at $26.98.
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