Salesforce vs Pegasystems Which Should You Buy?

Salesforce and Pegasystems are two leading companies in the customer relationship management (CRM) and business process management (BPM) software industries. Both companies have seen significant growth in their stock prices in recent years, driven by their innovative technologies and strong financial performances. While Salesforce is known for its cloud-based CRM solutions, Pegasystems offers BPM software that helps businesses automate and streamline their workflows. Investors are closely watching these two stocks to see which company will continue to outperform in the highly competitive tech market.

Salesforce or Pegasystems?

When comparing Salesforce and Pegasystems, 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 Salesforce and Pegasystems.

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. Salesforce has a dividend yield of 0.47%, while Pegasystems has a dividend yield of 0.14%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Salesforce reports a 5-year dividend growth of 0.00% year and a payout ratio of 13.71%. On the other hand, Pegasystems reports a 5-year dividend growth of 0.00% year and a payout ratio of 8.25%.

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 Salesforce P/E ratio at 58.49 and Pegasystems's P/E ratio at 61.39. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Salesforce P/B ratio is 5.72 while Pegasystems's P/B ratio is 15.93.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Salesforce has seen a 5-year revenue growth of 1.16%, while Pegasystems's is 0.60%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Salesforce's ROE at 9.58% and Pegasystems's ROE at 29.72%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $325.25 for Salesforce and $86.31 for Pegasystems. Over the past year, Salesforce's prices ranged from $211.76 to $344.87, with a yearly change of 62.86%. Pegasystems's prices fluctuated between $44.07 and $88.40, with a yearly change of 100.59%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.