SAP SE (NYSE: SAP) and ServiceNow (NYSE:NOW) are both large-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, earnings, dividends, valuation and profitabiliy.
Institutional and Insider Ownership
3.7% of SAP SE shares are owned by institutional investors. Comparatively, 97.6% of ServiceNow shares are owned by institutional investors. 7.4% of SAP SE shares are owned by insiders. Comparatively, 3.3% of ServiceNow shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Profitability
This table compares SAP SE and ServiceNow’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| SAP SE | 14.81% | 14.19% | 8.17% |
| ServiceNow | -10.60% | -31.34% | -6.09% |
Dividends
SAP SE pays an annual dividend of $0.98 per share and has a dividend yield of 0.9%. ServiceNow does not pay a dividend. SAP SE pays out 31.5% of its earnings in the form of a dividend.
Volatility and Risk
SAP SE has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, ServiceNow has a beta of 1.33, suggesting that its stock price is 33% more volatile than the S&P 500.
Earnings and Valuation
This table compares SAP SE and ServiceNow’s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| SAP SE | $25.83 billion | 4.84 | $6.72 billion | $3.11 | 33.53 |
| ServiceNow | $1.50 billion | 12.25 | -$49.29 million | ($0.96) | -112.70 |
SAP SE has higher revenue and earnings than ServiceNow. ServiceNow is trading at a lower price-to-earnings ratio than SAP SE, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of current ratings for SAP SE and ServiceNow, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| SAP SE | 1 | 4 | 12 | 0 | 2.65 |
| ServiceNow | 0 | 5 | 23 | 0 | 2.82 |
SAP SE presently has a consensus target price of $96.27, suggesting a potential downside of 7.68%. ServiceNow has a consensus target price of $106.74, suggesting a potential downside of 1.34%. Given ServiceNow’s stronger consensus rating and higher probable upside, analysts clearly believe ServiceNow is more favorable than SAP SE.
Summary
SAP SE beats ServiceNow on 8 of the 15 factors compared between the two stocks.
About SAP SE
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.
About ServiceNow
ServiceNow, Inc. is provider of enterprise cloud computing solutions that define, structure, manage and automate services for global enterprises. The Company offers a set of cloud-based services that automate workflow within and between departments in an enterprise. It provides workflow solutions, and focuses on service management for customer support, human resources, security operations and other enterprise departments. The platform also enables customers to create, by themselves or with its partners, their own service-oriented business applications throughout the enterprise. The Company delivers its software through the Internet as a service. It markets its services to enterprises in a range of industries, including financial services, consumer products, information technology services, healthcare, government, education and technology. It operates data centers in Australia, Brazil, Canada, Hong Kong, the Netherlands, Singapore, Switzerland, the United Kingdom and the United States.
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