SAP vs Alphabet

SAP and Alphabet are two major players in the technology sector with significant market influence. SAP is a German multinational software corporation known for its enterprise resource planning software solutions, while Alphabet is the parent company of Google, dominating the online advertising market. Both companies have seen substantial growth and success in recent years, but their stocks have different characteristics and market performances. Understanding the differences and similarities between SAP and Alphabet stocks is crucial for investors looking to make informed decisions in the tech industry.

SAP or Alphabet?

When comparing SAP 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 SAP 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. SAP has a dividend yield of 1.04%, while Alphabet has a dividend yield of 0.36%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. SAP reports a 5-year dividend growth of 6.69% year and a payout ratio of 96.76%. On the other hand, Alphabet reports a 5-year dividend growth of 0.00% year and a payout ratio of 2.81%.

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 SAP P/E ratio at 92.76 and Alphabet's P/E ratio at 23.30. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. SAP P/B ratio is 5.90 while Alphabet's P/B ratio is 6.79.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, SAP has seen a 5-year revenue growth of 0.29%, while Alphabet's is 1.47%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with SAP's ROE at 6.21% and Alphabet's ROE at 30.48%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $227.82 for SAP and $166.05 for Alphabet. Over the past year, SAP's prices ranged from $127.30 to $232.23, with a yearly change of 82.43%. Alphabet's prices fluctuated between $121.46 and $193.31, with a yearly change of 59.16%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.