Cisco Systems, Inc. (CSCO), Juniper Networks, Inc. (JNPR), Alcatel Lucent SA (ADR) (ALU): This Stock Looks Good Even at 52-Week Highs

Cisco has an impressive performance under its belt which boasts of wireless revenue growth of 27% and routing and data center growth of 77% in the last year.

Cisco Systems, Inc. (NASDAQ:CSCO) is expanding its foothold globally and is present in the high growth emerging markets apart from the U.S. It is rapidly growing in the cloud computing segment while the conventional networking equipment segment is growing slowly.

Consistent revenue is also expected from its recent acquisition of Sourcefire, for which Cisco paid an amount that equals the amount of cash that Juniper has — $2.8 billion. Juniper has no such option to think about. On basis of excellent cash flows and good growth opportunities, Cisco, in my opinion, is one of the best dividend stocks in the market.

Alcatel Lucent SA (ADR) (NYSE:ALU) is in a mess as far as fundamentals are concerned. CEO Michel Combes had come up with a strategy, which he referred to as “The Shift Plan” that is aimed to streamline the company’s operations by diverting focus from some of its multiple projects to a few key business units. According to the plan, Alcatel-Lucent will focus on cutting costs and sale of assets in a restructuring program slated for completion in 2015.

Alcatel-Lucent delivered improved financial results in 2Q13, which showed revenue growth and a positive operating margin as highlights. However, the gross margin continues to lag peers and is unlikely to grow substantially until margin-unfavorable business segments are either reduced or divested.

In my opinion, it would be worthwhile to watch this company from the sidelines.

Conclusion

While Juniper doesn’t have the financial muscle or size of Cisco Systems, Inc. (NASDAQ:CSCO), the company’s product development initiatives do look good and have enabled it to perform well so far. The stock is presently trading near its 52 week high with a trailing P/E of 38, but analysts are expecting solid growth in earnings in the future of around 15% per annum over the next five years. Given the innovation of the company, it looks like it will be able to achieve earnings growth and the stock should continue appreciating in the future.

ANUP SINGH has no position in any stocks mentioned. The Motley Fool recommends Cisco Systems, Inc. (NASDAQ:CSCO).

The article This Stock Looks Good Even at 52-Week Highs originally appeared on Fool.com and is written by ANUP SINGH.

ANUP is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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