Intuit (NASDAQ:INTU) and SAP (NYSE:SAP) are both large-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.
Profitability
This table compares Intuit and SAP's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Intuit | 25.10% | 40.29% | 21.60% |
| SAP | 17.59% | 17.39% | 8.59% |
Valuation and Earnings
This table compares Intuit and SAP's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Intuit | $7.68 billion | 13.42 | $1.83 billion | $6.56 | 57.37 |
| SAP | $30.86 billion | 4.72 | $3.72 billion | $4.02 | 30.36 |
SAP has higher revenue and earnings than Intuit. SAP is trading at a lower price-to-earnings ratio than Intuit, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Intuit has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500. Comparatively, SAP has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500.
Dividends
Intuit pays an annual dividend of $2.36 per share and has a dividend yield of 0.6%. SAP pays an annual dividend of $1.25 per share and has a dividend yield of 1.0%. Intuit pays out 36.0% of its earnings in the form of a dividend. SAP pays out 31.1% 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. Intuit has raised its dividend for 9 consecutive years. SAP is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Ratings
This is a summary of recent ratings and target prices for Intuit and SAP, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Intuit | 1 | 3 | 16 | 0 | 2.75 |
| SAP | 0 | 12 | 11 | 0 | 2.48 |
Intuit presently has a consensus price target of $426.4286, indicating a potential upside of 13.31%. SAP has a consensus price target of $131.2727, indicating a potential upside of 7.57%. Given Intuit's stronger consensus rating and higher probable upside, equities research analysts plainly believe Intuit is more favorable than SAP.
Institutional & Insider Ownership
84.8% of Intuit shares are owned by institutional investors. 3.4% of Intuit shares are owned by insiders. Comparatively, 7.4% of SAP shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Summary
Intuit beats SAP on 11 of the 17 factors compared between the two stocks.
