SAP SE (SAP) & QAD (QADB) Financial Contrast

SAP SE (NYSE: SAP) and QAD (NASDAQ:QADB) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitability, earnings and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for SAP SE and QAD, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SAP SE 1 4 13 0 2.67
QAD 0 0 1 0 3.00

SAP SE presently has a consensus target price of $95.40, suggesting a potential downside of 13.42%. QAD has a consensus target price of $33.00, suggesting a potential upside of 23.60%. Given QAD’s stronger consensus rating and higher probable upside, analysts clearly believe QAD is more favorable than SAP SE.

Valuation & Earnings

This table compares SAP SE and QAD’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
SAP SE $27.13 billion 4.87 $6.76 billion $3.11 35.43
QAD $290.14 million 1.76 $10.59 million ($0.94) -28.40

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

Risk and Volatility

SAP SE has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500. Comparatively, QAD has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500.

Institutional and Insider Ownership

3.6% of SAP SE shares are owned by institutional investors. Comparatively, 1.8% of QAD shares are owned by institutional investors. 67.4% of QAD shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares SAP SE and QAD’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SAP SE 14.81% 14.28% 8.20%
QAD -5.98% -0.47% -0.20%

Dividends

SAP SE pays an annual dividend of $0.98 per share and has a dividend yield of 0.9%. QAD pays an annual dividend of $0.24 per share and has a dividend yield of 0.9%. SAP SE pays out 31.5% of its earnings in the form of a dividend. QAD pays out -25.5% 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. QAD is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

SAP SE beats QAD on 10 of the 15 factors compared between the two stocks.

SAP SE Company Profile

SAP SE (SAP) is a software and service provider. The Company offers enterprise application software. The Company operates through two segments: Applications, Technology & Services segment, and the SAP Business Network segment. The Applications, Technology & Services segment is engaged in the sale of software licenses, subscriptions to its cloud applications, and related services (primarily support services and various professional services, and support services, as well as implementation services of its software products and education services on the use of its products). The SAP Business Network segment includes its cloud-based collaborative business networks and services relating to the SAP Business Network (including cloud applications, professional services and education services). Within the SAP Business Network segment, the Company markets and sells the cloud offerings developed by SAP Ariba, SAP Fieldglass and Concur.

QAD Company Profile

QAD Inc. (QAD) is a provider of vertically oriented enterprise software solutions for global manufacturing companies across the automotive, life sciences, consumer products, food and beverage, high technology and industrial products industries. QAD Enterprise Applications enables measurement and control of business processes and supports operational requirements, including financials, manufacturing, demand and supply chain planning, customer management, business intelligence and business process management. QAD delivers components of its solution for a range of mobile platforms. The Company’s mobile suite includes a requisition approval solution, a mobile business intelligence solution, mobile browse capability and mobile application monitoring tools to support system administrators. Its mobile browse capability allows users to view, filter and sort data accessible through QAD Browses within QAD Enterprise Applications using mobile devices.

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