Oracle vs SAP Which Offers More Value?

Oracle and SAP are two major players in the enterprise software industry, with both companies offering a wide range of products and services to businesses around the world. When it comes to their stocks, Oracle and SAP have seen fluctuations in their value over the years, mirroring the ups and downs of the tech market. Investors often compare the two companies' stocks to determine which may be a better investment opportunity. Let's take a closer look at how Oracle and SAP stocks have performed in recent years.

Oracle or SAP?

When comparing Oracle and SAP, 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 SAP.

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 0.92%, while SAP has a dividend yield of 0.97%. 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, SAP reports a 5-year dividend growth of 6.69% year and a payout ratio of 90.44%.

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 41.61 and SAP's P/E ratio at 99.00. 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 33.98 while SAP's P/B ratio is 6.81.

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 SAP's is -0.21%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Oracle's ROE at 118.08% and SAP's ROE at 6.71%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $171.64 for Oracle and $251.53 for SAP. Over the past year, Oracle's prices ranged from $99.36 to $198.31, with a yearly change of 99.59%. SAP's prices fluctuated between $148.38 and $256.13, with a yearly change of 72.62%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.