Upstart Internet of Things (IoT) connectivity provider CalAmp (NASDAQ:CAMP) and veteran tech powerhouse Cisco (NASDAQ:CSCO) have a lot in common. Both are fully committed to expanding their footprints in the IoT market. And shareholders of both are enjoying a stellar year. CalAmp stock is up 56% in 2017 while Cisco's 24% gains are nothing to sneeze at. Both are also sound, long-term investments -- but which is the better buy?

The answer to that question boils down to your investment objectives, risk tolerance, and time frame.

Picture of multiple devices including a plane, rail car, and heavy machinery all interconnected.

Image source: Getty Images.

The case for CalAmp

After factoring out the numbers from its now-divested satellite division,    CalAmp's $89.8 million in fiscal second-quarter 2018 revenue was a 7% year-over-year improvement. CalAmp also reported a significant jump in earnings-per-share (EPS) of $0.34, well above the $0.01 a share from a year ago.

There's a caveat to that ballooning bottom line, however: It includes a $15 million payment received as part of a legal settlement with a former battery supplier to its Lojack subsidiary. The upside is CalAmp expects another $31 million over the next four quarters to finally settle the matter.

While last quarter was sound, at first glance, the number might not seem to justify CalAmp's soaring stock price. However, several recent wins and momentum gains in key IoT markets add a key layer to the story. And its improving relationship with giant Caterpillar (NYSE:CAT), one of its largest customers, continues to pay dividends. CalAmp's revenue from Caterpillar grew 7.4% sequentially last quarter, raising the heavy-equipment-maker's contribution to its coffers to a record $10.5 million.

In other good news, CalAmp's telematics division, which includes its long distance connectivity offerings, inked another major logistics contract.

Thanks to an expanded product line-up, revenue from the mobile resource management (MRM) telematics segment jumped 29% to a record $38.1 million. CalAmp also signed its largest ever software-as-a-Service (SaaS) contract. It's expecting another solid quarter, but for investors, it's the momentum it's gaining in one of the world's fastest-growing business areas that makes its stock worth considering.

Picture of a city's cloverleaf highway glowing at night with multiple points connected by lines.

Image source: Getty Images.

The case for Cisco

When Cisco reported fiscal 2018 first-quarter earnings on Nov. 14, investors finally got on board. CEO Chuck Robbins' transition away from a reliance on its legacy routers and switches to a focus on cloud IaaS, IoT, and software wasn't going to happen overnight. But it has become apparent that Cisco's newer businesses are beginning to fire on all cylinders.

Total revenue declined  2% to $12.14 billion, but Robbins' efforts to improve efficiency are paying off. Trimming overhead by 7% to $4.67 billion boosted Cisco's EPS 4% to $0.48. But the highlight of Cisco's Q1 -- and another reason its stock warrants consideration -- was the growth of subscriptions and software sales, which in turn generate recurring revenue.

Recurring revenue climbed again last quarter, up 3 percentage points to 32%. Nearly a third of Cisco's revenue -- $3.88 billion -- is now recurring. The revenue foundation Cisco is building is something long-term investors will be able to rely on, which is particularly attractive for the more conservative among us.

Cisco ended last quarter with a stellar 10% increase in deferred revenue to $18.6 billion, including a 16% increase in deferred product sales. The jump in product deferred revenue -- a good indicator of Cisco's sales pipeline -- was "driven largely by subscription-based and software offers."

In fact, subscriptions and software deferred revenue skyrocketed 37%. It's safe to say Cisco is delivering on its objectives, and based on its stock performance of late, investors are taking notice.

The envelope, please

Choosing the better buy between these two tech companies is no easy feat. CalAmp is winning contract after contract while expanding both its product lineup and its existing customer relationships. There's little doubt it's on the cusp of another strong year, and it shows no signs of slowing.

Cisco may not offer the meteoric upside of CalAmp, but its 3% dividend yield, recurring revenue, and its determined forays into fast-growing markets all bode well for its success. Bottom line? For those seeking a pure growth alternative, CalAmp is tough to beat. But for those of us who prefer slow and steady investment's, Cisco's reliable growth, value relative to its peers, and dividend, earn it the nod.

Tim Brugger has no position in any of the stocks mentioned. The Motley Fool recommends CalAmp and Cisco Systems. The Motley Fool has a disclosure policy.