Image sources: Cisco Systems, Sierra Wireless,

With a world of opportunities for tech companies to find growth today, arguably none are greater than the Internet of Things (IoT) -- that is, the trend of adding Internet connectivity to otherwise ordinary things in our lives. But for investors, often the most difficult task is figuring out exactly which Internet of Things stocks to buy.

So let's tackle two very different companies for which the Internet of Things represents a tantalizing opportunity: Sierra Wireless (SWIR) and Cisco Systems (CSCO 0.06%).

Which is the better buy for investors looking to put money to work today? That depends on your particular risk tolerance and investing goals. 

The IoT juggernaut
On one hand we have Cisco, a global tech juggernaut that generated revenue of more than $49 billion last fiscal year and net income of $9 billion and boasts a market capitalization of more than $144 billion as of this writing. In short, Cisco is already an undisputed leader in the networking world, so it should come as no surprise Cisco has its enormous wings spread over the Internet of Things market.

Image source: Cisco.

For one, Cisco offers scalable IoT systems using its networking hardware and software platforms, largely aimed at streamlining Internet of Things implementations for other enterprises working in virtually any industry. Harley-Davidson, for example, has already deployed Cisco's IoT system to implement a new plantwide Ethernet architecture and digital signage, which both gives the company's better supply chain flexibility and reduces plant downtime. And multiple cities, including Hamburg, Germany, and Mississuaga, Canada, already use the Cisco IoT system to do things such as coordinate traffic, transit, parking systems, and smart lighting solutions.

But while Cisco's size and global scope offers stability for investors -- as well as a healthy 3.7% annual dividend yield as of this writing -- it's also much more difficult for the company to turn even burgeoning opportunities like the Internet of Things into significant incremental growth streams opportunities relative to what they have already achieved. Most recently, Cisco's revenue climbed a modest 2% year over year last quarter, to $11.8 billion, while net income rose 8%, to $3.1 billion, with the disparity owed primarily to Cisco's efforts to drive increased productivity and reduce operating expenses. Over the next five years, Cisco anticipates revenue growth to accelerate ever so slightly to a range of 3% to 6%, while adjusted earnings per share should climb around 5% to 7% -- and this despite Cisco's estimate that connected devices worldwide will grow from 15 billion today to 50 billion by 2020.

That's not to say slow and steady can't win the race. To reward investors for their patience, last quarter Cisco not only increased its quarterly dividend by 24%, to $0.26 per share, but also approved a $15 billion share repurchase in addition to its previously authorized $97 billion repurchase plan. The latter brought the total remaining authorized amount under the plan to $16.9 billion, or around 12% of its total float. But that plan also has no set expiration, and Cisco investors still shouldn't expect to buy shares for outsized growth. In the end, this partly explains why Cisco stock currently trades for an attractive 14.2 times trailing-12-month earnings and 12 times next year's estimates.

The small-cap growth play
On the other hand, if you're looking with something with more room to grow -- albeit with significantly more volatility -- consider Internet of Things pure play and machine-to-machine communications specialist Sierra Wireless.

Image source: Sierra Wireless.

Shares of Sierra Wireless more than quintupled between the beginning of 2013 and the end of 2014 on strong year-over-year growth in both revenue and earnings, crushing the returns of both the broader market and Cisco. Last year, however, things took a turn for the worst as Sierra Wireless' revenue growth decelerated with each passing quarter, then ultimately reversed course as revenue fell 2.8% year over year in its most recent quarter, to $144.8 million. Sierra Wireless blamed soft demand at OEM customers for the most recent decline, primarily due to increased caution in the face of uncertain macroeconomic headwinds. As a result, investors who bought shares of Sierra Wireless this time last year have seen the stock decline a harrowing 60%.

But for opportunistic investors with the patience to watch Sierra Wireless' growth story continue to unfold, now could be the perfect time to buy. Along with their disappointing report last quarter, Sierra Wireless management voiced their belief that the business should gain strength as 2016 progresses. For the full year, the company anticipates revenue of $630 million to $670 million, or growth of 6.9% at the midpoint despite last quarter's drop. And as it stands, the company is focusing on driving growth with outsized contributions from both its Enterprise Solutions and Cloud and Connectivity businesses, which currently account for just 14% of consolidated revenue. But as Sierra Wireless approaches its goal of $1 billion in annual revenue in the coming years, these higher-margin businesses should collectively account for around 30% of sales.

In the meantime -- and much in the same way Cisco is doing so -- Sierra Wireless started putting its money where its mouth is with a "Notice of Intention to make a Normal Course Issuer Bid" beginning last month. That is a kind of controlled share repurchase authorization under which Sierra Wireless is able to purchase and retire up to 3,149,199 shares of common stock, or roughly 10% of its public float, subject to a per-day minimum of 22,269 shares. And it's hard to blame them considering Sierra Wireless shares currently trade for a reasonable 13.3 times next year's expected earnings.

The verdict
So which is the better buy? Given my personal high tolerance for risk and long-term time frame, Sierra Wireless gets my vote. That's not to say Cisco can't also deliver positive returns in the coming years. But as the smaller, nimbler company and effectively a pure play on the burgeoning Internet of Things space, Sierra Wireless simply has a greater chance of beating the market by a wider margin going forward.