Oracle vs Salesforce Which Offers More Value?

Oracle and Salesforce are two major players in the world of cloud computing and enterprise software. Both companies have experienced significant growth in recent years, with their stocks performing well in the market. Oracle, established in 1977, is known for its database management systems and enterprise software solutions. On the other hand, Salesforce, founded in 1999, is a leading provider of customer relationship management (CRM) software. Investors often compare the stocks of these two companies to determine which one offers better long-term growth potential and profitability.

Oracle or Salesforce?

When comparing Oracle and Salesforce, 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 Salesforce.

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 Salesforce has a dividend yield of 0.34%. 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, Salesforce reports a 5-year dividend growth of 0.00% year and a payout ratio of 14.69%.

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 42.86 and Salesforce's P/E ratio at 43.49. 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 35.00 while Salesforce's P/B ratio is 5.84.

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 Salesforce's is 1.16%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Oracle's ROE at 118.08% and Salesforce's ROE at 13.35%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $174.85 for Oracle and $351.88 for Salesforce. Over the past year, Oracle's prices ranged from $99.26 to $198.31, with a yearly change of 99.79%. Salesforce's prices fluctuated between $212.00 and $369.00, with a yearly change of 74.06%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.