Comparing Blackbaud (NASDAQ:BLKB) and SAP (NYSE:SAP)

Blackbaud (NASDAQ:BLKB) and SAP (NYSE:SAP) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.

Insider & Institutional Ownership

94.2% of Blackbaud shares are held by institutional investors. 2.0% of Blackbaud shares are held by insiders. Comparatively, 7.4% of SAP shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Blackbaud and SAP”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Blackbaud	$1.14 billion	2.39	-$283.17 million	($5.20)	-10.93
SAP	$36.49 billion	8.09	$3.38 billion	$6.68	35.96

SAP has higher revenue and earnings than Blackbaud. Blackbaud is trading at a lower price-to-earnings ratio than SAP, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Blackbaud and SAP’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Blackbaud	-22.57%	137.13%	5.46%
SAP	19.50%	15.69%	9.67%

Risk and Volatility

Blackbaud has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500. Comparatively, SAP has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500.

Dividends

Blackbaud pays an annual dividend of $0.48 per share and has a dividend yield of 0.8%. SAP pays an annual dividend of $1.84 per share and has a dividend yield of 0.8%. Blackbaud pays out -9.2% of its earnings in the form of a dividend. SAP pays out 27.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Blackbaud is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current recommendations for Blackbaud and SAP, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Blackbaud	1	2	0	1	2.25
SAP	0	1	15	1	3.00

Blackbaud presently has a consensus price target of $73.00, suggesting a potential upside of 28.39%. SAP has a consensus price target of $284.33, suggesting a potential upside of 18.38%. Given Blackbaud’s higher possible upside, analysts clearly believe Blackbaud is more favorable than SAP.

Summary

SAP beats Blackbaud on 11 of the 16 factors compared between the two stocks.

About Blackbaud

Blackbaud, Inc. provides cloud software solutions to nonprofits, foundations, education institutions, and healthcare organizations in the United States and internationally. The company offers fundraising and engagement solutions, such as Blackbaud Raiser's Edge NXT, Blackbaud CRM, Blackbaud eTapestry, Blackbaud Luminate Online, Blackbaud TeamRaiser, JustGiving, Blackbaud Fundraiser Performance Management, Blackbaud Guided Fundraising, and Blackbaud Altru; and financial management solutions comprising Blackbaud Financial Edge NXT, Blackbaud Tuition Management, and Blackbaud Financial Aid and Billing Management. It also provides grant and award management solutions, consisting of Blackbaud Grantmaking and Blackbaud Award Management; education solutions, such as Blackbaud Student Information System, Blackbaud Learning Management System, Blackbaud Enrollment Management System, and Blackbaud School Website System; social responsibility solutions, which includes YourCause GrantsConnect and YourCause CSRconnect, and EVERFI; Blackbaud Merchant Services and Blackbaud Purchase Cards payment services; and Blackbaud's Intelligence for Good solutions, as well as Data Health, Insights, and Performance solutions and services. The company sells its solutions and related services through its direct sales force. Blackbaud, Inc. was founded in 1981 and is headquartered in Charleston, South Carolina.

About SAP

SAP SE, together with its subsidiaries, provides applications, technology, and services worldwide. It offers SAP S/4HANA that provides software capabilities for finance, risk and project management, procurement, manufacturing, supply chain and asset management, and research and development; SAP SuccessFactors solutions for human resources, including HR and payroll, talent and employee experience management, and people and workforce analytics; and spend management solutions that covers direct and indirect spend, travel and expense, and external workforce management. The company also provides SAP customer experience solutions; SAP Business Technology platform that enables customers and partners to build, integrate, and automate applications; and SAP Business Network, a business-to-business collaboration platform that helps digitalize key business processes across the supply chain and enables communication between trading partners. In addition, it offers SAP Signavio to help customers to discover, analyze, and understand their business process operations; SAP's industry cloud solutions that provides modular solutions addressing industry-specific functions; Taulia solutions for working capital management to help enable customers mitigate the effects of inflation by providing visibility into working capital and access to liquidity; and sustainability solutions and services. SAP SE was founded in 1972 and is headquartered in Walldorf, Germany.