Head to Head Analysis: Oracle (NYSE:ORCL) & Open Text (NASDAQ:OTEX)

Oracle (NYSE:ORCL) and Open Text (NASDAQ:OTEX) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, earnings, profitability, analyst recommendations, institutional ownership and dividends.

Earnings and Valuation

This table compares Oracle and Open Text”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oracle	$59.02 billion	10.03	$12.44 billion	$4.32	48.09
Open Text	$5.17 billion	1.63	$435.87 million	$1.91	17.52

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

Profitability

This table compares Oracle and Open Text’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Oracle	21.08%	72.93%	8.54%
Open Text	9.60%	23.44%	6.96%

Institutional and Insider Ownership

42.4% of Oracle shares are owned by institutional investors. Comparatively, 70.4% of Open Text shares are owned by institutional investors. 40.9% of Oracle shares are owned by company insiders. Comparatively, 10.6% of Open Text shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Oracle pays an annual dividend of $2.00 per share and has a dividend yield of 1.0%. Open Text pays an annual dividend of $1.10 per share and has a dividend yield of 3.3%. Oracle pays out 46.3% of its earnings in the form of a dividend. Open Text pays out 57.6% 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. Oracle has increased its dividend for 1 consecutive years.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Oracle and Open Text, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oracle	2	11	28	3	2.73
Open Text	0	10	3	1	2.36

Oracle presently has a consensus price target of $323.68, suggesting a potential upside of 55.81%. Open Text has a consensus price target of $39.42, suggesting a potential upside of 17.80%. Given Oracle’s stronger consensus rating and higher probable upside, equities analysts plainly believe Oracle is more favorable than Open Text.

Risk & Volatility

Oracle has a beta of 1.66, suggesting that its stock price is 66% more volatile than the S&P 500. Comparatively, Open Text has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500.

Summary

Oracle beats Open Text on 16 of the 18 factors compared between the two stocks.

About Oracle

Oracle Corporation offers products and services that address enterprise information technology environments worldwide. Its Oracle cloud software as a service offering include various cloud software applications, including Oracle Fusion cloud enterprise resource planning (ERP), Oracle Fusion cloud enterprise performance management, Oracle Fusion cloud supply chain and manufacturing management, Oracle Fusion cloud human capital management, Oracle Cerner healthcare, Oracle Advertising, and NetSuite applications suite, as well as Oracle Fusion Sales, Service, and Marketing. The company also offers cloud-based industry solutions for various industries; Oracle application licenses; and Oracle license support services. In addition, it provides cloud and license business' infrastructure technologies, such as the Oracle Database and MySQL Database; Java, a software development language; and middleware, including development tools and others. The company's cloud and license business' infrastructure technologies also comprise cloud-based compute, storage, and networking capabilities; and Oracle autonomous database, MySQL HeatWave, Internet-of-Things, digital assistant, and blockchain. Further, it provides hardware products and other hardware-related software offerings, including Oracle engineered systems, enterprise servers, storage solutions, industry-specific hardware, virtualization software, operating systems, management software, and related hardware services; and consulting and customer services. The company markets and sells its cloud, license, hardware, support, and services offerings directly to businesses in various industries, government agencies, and educational institutions, as well as through indirect channels. The company has a collaboration with Amdocs Limited to empower customers on their journey towards cloud and digital adoption. Oracle Corporation was founded in 1977 and is headquartered in Austin, Texas.

About Open Text

Open Text Corporation provides information management software and solutions. The company offers content services, which includes content collaboration and intelligent capture to records management, collaboration, e-signatures, and archiving; and operates experience cloud platform that provides customer experience and web content management, digital asset management, customer analytics, AI and insights, e-discovery, digital fax, omnichannel communications, secure messaging, and voice of customer, as well as customer journey, testing, and segmentation. It also provides cybersecurity cloud solutions to protect, prevent, detect, respond and quickly recover from threats across endpoints, network, applications, IT infrastructure and data, AI-led threat intelligence; and to protect critical information and processes through threat intelligence, forensics, identity, encryption, and cloud-based application security. In addition, the company offers business network cloud for digital supply chains and secure e-commerce ecosystems including digitize and automate procure-to-pay and order-to-cash processes; IT operations management cloud for automation and advancement of IT support and asset management; and analytics & AI cloud solutions that offers artificial intelligence with practical usage to provide organizations with actionable insights and better automation, such as visualizations, advanced natural language processing and understanding, and integrated computer vision capabilities. In addition, it provides application automation cloud, developers cloud, and services. Further, it has strategic partnerships with SAP SE, Google Cloud, Amazon AWS, Microsoft Corporation, Oracle Corporation, Salesforce.com Corporation, DXC Technology Company, Accenture plc, Capgemini Technology Services SAS, Deloitte Consulting LLP, Hewlett Packard Enterprises, and Tata Consultancy Services. Open Text Corporation was incorporated in 1991 and is headquartered in Waterloo, Canada.