SAP vs Workday Which Offers More Value?

SAP and Workday are two major players in the enterprise software industry, each offering a unique set of solutions for businesses of all sizes. SAP, a German multinational corporation, has been a dominant force in the market for decades with its robust suite of ERP and business management software. Workday, on the other hand, is a newer player specializing in cloud-based HR and financial management solutions. Both companies have seen significant growth in their stock prices in recent years, making them popular choices for investors seeking exposure to the tech sector.

SAP or Workday?

When comparing SAP and Workday, 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 Workday.

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 Workday has a dividend yield of -%. 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, Workday 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 SAP P/E ratio at 99.00 and Workday's P/E ratio at 44.82. 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 Workday's P/B ratio is 8.42.

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 Workday's is 1.37%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with SAP's ROE at 6.71% and Workday's ROE at 19.52%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $251.53 for SAP and $270.56 for Workday. Over the past year, SAP's prices ranged from $148.38 to $256.13, with a yearly change of 72.62%. Workday's prices fluctuated between $199.81 and $311.28, with a yearly change of 55.79%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.