Software Aktiengesellschaft (ETR:SOW) and Varta (ETR:VAR1) are both mid-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, risk, dividends, analyst recommendations, earnings and valuation.
Earnings & Valuation
This table compares Software Aktiengesellschaft and Varta's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Software Aktiengesellschaft | $834.85 million | 3.17 | $95.43 million | €1.29 | 27.72 |
Varta | $874.56 million | 5.50 | $95.40 million | €2.36 | 50.40 |
Software Aktiengesellschaft has higher earnings, but lower revenue than Varta. Software Aktiengesellschaft is trading at a lower price-to-earnings ratio than Varta, indicating that it is currently the more affordable of the two stocks.
Dividends
Software Aktiengesellschaft pays an annual dividend of €0.76 per share and has a dividend yield of 2.1%. Varta pays an annual dividend of €2.50 per share and has a dividend yield of 2.1%. Software Aktiengesellschaft pays out 58.9% of its earnings in the form of a dividend. Varta pays out 105.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Software Aktiengesellschaft is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Recommendations
This is a breakdown of current ratings and target prices for Software Aktiengesellschaft and Varta, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Software Aktiengesellschaft | 0 | 7 | 4 | 0 | 2.36 |
Varta | 5 | 3 | 0 | 0 | 1.38 |
Software Aktiengesellschaft currently has a consensus target price of €38.87, indicating a potential upside of 8.70%. Varta has a consensus target price of €102.57, indicating a potential downside of 13.77%. Given Software Aktiengesellschaft's stronger consensus rating and higher possible upside, equities analysts plainly believe Software Aktiengesellschaft is more favorable than Varta.
Profitability
This table compares Software Aktiengesellschaft and Varta's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Software Aktiengesellschaft | N/A | N/A | N/A |
Varta | N/A | N/A | N/A |
Summary
Software Aktiengesellschaft beats Varta on 6 of the 10 factors compared between the two stocks.