SAP vs Oracle Which Outperforms?

SAP and Oracle are two of the largest enterprise software companies in the world, and their stocks are often compared in the investment world. Both companies offer a wide range of products and services for businesses, but their approaches, market positions, and financial performance differ significantly. SAP, based in Germany, focuses on cloud-based solutions and has a strong presence in Europe, while Oracle, headquartered in the US, has a more diverse product portfolio and a significant market share in North America. Investors closely monitor both companies' stock performance to assess their potential for growth and profitability.

SAP or Oracle?

When comparing SAP and Oracle, 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 Oracle.

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 0.97%, while Oracle has a dividend yield of 0.92%. 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 90.44%. On the other hand, Oracle reports a 5-year dividend growth of 14.87% year and a payout ratio of 38.04%.

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

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 -0.21%, while Oracle's is 0.92%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with SAP's ROE at 6.71% and Oracle's ROE at 118.08%.

Retail Investors:

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