SAP (NYSE:SAP) vs. SS&C Technologies (NASDAQ:SSNC) Financial Review

SAP (NYSE:SAP) and SS&C Technologies (NASDAQ:SSNC) are both large-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, dividends, valuation and analyst recommendations.

Dividends

SAP pays an annual dividend of $1.84 per share and has a dividend yield of 1.1%. SS&C Technologies pays an annual dividend of $1.08 per share and has a dividend yield of 1.6%. SAP pays out 26.1% of its earnings in the form of a dividend. SS&C Technologies pays out 34.2% 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. SS&C Technologies has increased its dividend for 9 consecutive years. SS&C Technologies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

96.9% of SS&C Technologies shares are owned by institutional investors. 7.4% of SAP shares are owned by company insiders. Comparatively, 16.4% of SS&C Technologies shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

SAP has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500. Comparatively, SS&C Technologies has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500.

Profitability

This table compares SAP and SS&C Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SAP	19.92%	16.54%	10.28%
SS&C Technologies	12.70%	19.60%	6.85%

Valuation and Earnings

This table compares SAP and SS&C Technologies”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SAP	$41.63 billion	5.07	$8.10 billion	$7.05	24.38
SS&C Technologies	$6.27 billion	2.63	$796.90 million	$3.16	21.62

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for SAP and SS&C Technologies, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SAP	0	8	11	2	2.71
SS&C Technologies	0	2	6	1	2.89

SAP currently has a consensus price target of $305.75, indicating a potential upside of 77.86%. SS&C Technologies has a consensus price target of $101.00, indicating a potential upside of 47.81%. Given SAP’s higher possible upside, analysts clearly believe SAP is more favorable than SS&C Technologies.

Summary

SAP beats SS&C Technologies on 12 of the 18 factors compared between the two stocks.

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.

About SS&C Technologies

SS&C Technologies Holdings, Inc. engages in the development and provision of software solutions to the financial services and healthcare industries. It operates through the following geographical segments: United States, Europe, Middle East and Africa, Asia Pacific and Japan, Canada, and the Americas, excluding the United States and Canada. Its products include advent genesis, antares, asset allocators, AWD, axys, BANC mall, BRIX, DST vision, evare, lightning, and moxy. The company was founded by William Charles Stone in March 1986 and is headquartered in Windsor, CT.