Salesforce (NYSE:CRM) versus Oracle (NYSE:ORCL) Head-To-Head Contrast

Salesforce (NYSE:CRM) and Oracle (NYSE:ORCL) are both large-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, risk, analyst recommendations and valuation.

Dividends

Salesforce pays an annual dividend of $1.76 per share and has a dividend yield of 1.0%. Oracle pays an annual dividend of $2.00 per share and has a dividend yield of 1.1%. Salesforce pays out 22.5% of its earnings in the form of a dividend. Oracle pays out 35.9% 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. Salesforce has increased its dividend for 1 consecutive years and Oracle has increased its dividend for 1 consecutive years.

Volatility and Risk

Salesforce has a beta of 1.29, meaning that its stock price is 29% more volatile than the S&P 500. Comparatively, Oracle has a beta of 1.6, meaning that its stock price is 60% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Salesforce and Oracle, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Salesforce	1	11	26	1	2.69
Oracle	1	9	27	3	2.80

Salesforce currently has a consensus target price of $279.18, suggesting a potential upside of 53.29%. Oracle has a consensus target price of $260.71, suggesting a potential upside of 48.91%. Given Salesforce’s higher probable upside, equities analysts clearly believe Salesforce is more favorable than Oracle.

Institutional and Insider Ownership

80.4% of Salesforce shares are held by institutional investors. Comparatively, 42.4% of Oracle shares are held by institutional investors. 3.0% of Salesforce shares are held by company insiders. Comparatively, 40.9% of Oracle shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Salesforce	$41.53 billion	4.05	$7.46 billion	$7.81	23.32
Oracle	$57.40 billion	8.77	$12.44 billion	$5.57	31.43

Oracle has higher revenue and earnings than Salesforce. Salesforce 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 Salesforce and Oracle’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Salesforce	17.96%	15.38%	9.19%
Oracle	25.30%	62.70%	8.65%

Summary

Oracle beats Salesforce on 12 of the 17 factors compared between the two stocks.

About Salesforce

Salesforce, Inc. provides Customer Relationship Management (CRM) technology that brings companies and customers together worldwide. The company's service includes sales to store data, monitor leads and progress, forecast opportunities, gain insights through analytics and artificial intelligence, and deliver quotes, contracts, and invoices; and service that enables companies to deliver trusted and highly personalized customer support at scale. In addition, its platform offering comprise a flexible platform that enables companies of various sizes, locations, and industries to build business workflow and apps with customer; online learning platform that allows anyone to learn in-demand Salesforce skills; and Slack, an intelligent productivity platform. The company's marketing services enables companies to plan, personalize, automate, and optimize customer marketing journey, connecting interaction, and connected products; and commerce services, which empowers shopping experience across various customer touchpoint, such as mobile, web, social, and stores and provides click-to-code tools that offers customers to build and deploy solutions. Further, its analytics offering includes Tableau, an end-to-end analytics solution for range of enterprise use cases and intelligent analytics with AI models, spot trends, predict outcomes, creates summaries, timely recommendations, and take action from any device; and integration service including MuleSoft, which provides building blocks to deliver end-to-end and connected experiences. Additionally, the company provides data cloud, a hyperscale data engine native to Salesforce; vertical services to meet the needs of customers in industries, such as financial services, healthcare and life sciences, manufacturing and automotive and government; and offers salesforce starter for small and medium-sized businesses. Salesforce, Inc. was incorporated in 1999 and is headquartered in San Francisco, California.

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.