Oracle vs Alphabet Which Is a Better Investment?

Oracle and Alphabet are two tech giants that have established themselves as leaders in their respective industries. Oracle specializes in enterprise software and cloud computing solutions, while Alphabet is known for its search engine and advertising platforms. Both companies have shown strong financial performance and market dominance, making them attractive options for investors. However, their stocks have different growth trajectories and risk profiles, making it important for investors to carefully consider their investment goals and tolerance for volatility before making a decision.

Oracle or Alphabet?

When comparing Oracle and Alphabet, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Oracle and Alphabet.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Oracle has a dividend yield of 0.9%, while Alphabet has a dividend yield of 0.32%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Oracle reports a 5-year dividend growth of 14.87% year and a payout ratio of 38.04%. On the other hand, Alphabet reports a 5-year dividend growth of 0.00% year and a payout ratio of 5.22%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Oracle P/E ratio at 42.43 and Alphabet's P/E ratio at 24.14. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Oracle P/B ratio is 34.65 while Alphabet's P/B ratio is 7.24.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Oracle has seen a 5-year revenue growth of 0.92%, while Alphabet's is 1.47%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Oracle's ROE at 118.08% and Alphabet's ROE at 31.66%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $171.06 for Oracle and $182.67 for Alphabet. Over the past year, Oracle's prices ranged from $99.26 to $198.31, with a yearly change of 99.79%. Alphabet's prices fluctuated between $131.06 and $193.31, with a yearly change of 47.50%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.