SAP (NYSE:SAP) versus Oracle (NYSE:ORCL) Head-To-Head Review

Oracle (NYSE:ORCL) and SAP (NYSE:SAP) are both large-cap computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, analyst recommendations, profitability, risk and earnings.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Oracle	25.28%	70.60%	9.22%
SAP	19.92%	16.52%	10.28%

Valuation and Earnings

This table compares Oracle and SAP”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oracle	$57.40 billion	7.16	$12.44 billion	$5.32	26.90
SAP	$41.63 billion	6.00	$8.29 billion	$7.05	28.85

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

Risk and Volatility

Oracle has a beta of 1.64, suggesting that its share price is 64% more volatile than the S&P 500. Comparatively, SAP has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Oracle and SAP, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oracle	1	11	26	3	2.76
SAP	0	5	13	3	2.90

Oracle currently has a consensus price target of $299.17, suggesting a potential upside of 109.05%. SAP has a consensus price target of $305.75, suggesting a potential upside of 50.31%. Given Oracle’s higher possible upside, analysts plainly believe Oracle is more favorable than SAP.

Insider & Institutional Ownership

42.4% of Oracle shares are held by institutional investors. 40.9% of Oracle shares are held by insiders. Comparatively, 7.4% of SAP shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers 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 1.4%. SAP pays an annual dividend of $1.84 per share and has a dividend yield of 0.9%. Oracle pays out 37.6% of its earnings in the form of a dividend. SAP pays out 26.1% 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 raised its dividend for 1 consecutive years. Oracle is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Oracle beats SAP on 12 of the 17 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 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.