Oracle’s Value Proposition in the Software Space
Oracle’s scale in the software space
So far in this series, we’ve discussed Oracle’s (ORCL) upgrades to its offerings as well as the company’s consistent initiatives to make a mark in the cloud space. We also discussed Oracle stock’s technical indicators and compared them with its peers.
On September 9, 2017, Microsoft (MSFT), with a market cap of ~$570 billion, is the world’s largest enterprise software player by market capitalization. It is followed by Oracle, IBM (IBM), and SAP AG (SAP).
Interested in ORCL? Don't miss the next report.
Receive e-mail alerts for new research on ORCL
Oracle’s valuation multiples
Oracle stock was trading at a forward EV-to-EBITDA1 multiple of ~10.4x on September 9, 2017. This metric was lower than Microsoft’s multiple of ~11.8x.
In comparison, IBM’s and SAP’s multiples stood at ~10.8x and ~21.5x, respectively, on the same date.
Oracle’s dividend yield
Oracle’s forward annual dividend yield was ~1.5% on September 9, which was lower than Microsoft’s and IBM’s forward dividend yields of ~2.1% and ~4.2%, respectively, on the same date. SAP’s dividend yield was ~1.5%.
You can consider investing in the SPDR S&P 500 ETF (SPY) (SPX) to gain exposure to the technology sector. The ETF has ~18.0% of its holdings in the technology sector.
In the final part of this series, we’ll discuss analyst recommendations for Oracle stock.
- enterprise value to earnings before interest, tax, depreciation, and amortization ↩