Salesforce vs ServiceNow Which Outperforms?

Salesforce and ServiceNow are two leading software companies that offer essential services for businesses. Salesforce is known for its customer relationship management (CRM) software, while ServiceNow specializes in IT service management. Both companies have seen significant growth in their stock prices in recent years, as they continue to innovate and expand their offerings. Investors may be drawn to Salesforce for its strong brand recognition and consistent revenue growth, while ServiceNow’s focus on digital transformation and automation could be appealing for those betting on the future of technology.

Salesforce or ServiceNow?

When comparing Salesforce and ServiceNow, 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 ServiceNow.

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

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 ServiceNow's P/E ratio at 159.87. 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 ServiceNow's P/B ratio is 22.99.

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 ServiceNow's is 2.00%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Salesforce's ROE at 9.58% and ServiceNow's ROE at 15.86%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $325.25 for Salesforce and $1013.00 for ServiceNow. Over the past year, Salesforce's prices ranged from $211.76 to $344.87, with a yearly change of 62.86%. ServiceNow's prices fluctuated between $632.25 and $1038.00, with a yearly change of 64.18%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.