Reviewing SAP (NYSE:SAP) & Trend Micro (OTCMKTS:TMICY)

Trend Micro (OTCMKTS:TMICY) and SAP (NYSE:SAP) are both technology companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, risk, earnings, valuation and institutional ownership.

Profitability

This table compares Trend Micro and SAP’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Trend Micro	12.30%	28.58%	8.73%
SAP	20.87%	17.49%	10.77%

Dividends

Trend Micro pays an annual dividend of $0.90 per share and has a dividend yield of 2.1%. SAP pays an annual dividend of $2.14 per share and has a dividend yield of 0.9%. Trend Micro pays out 51.1% of its earnings in the form of a dividend. SAP pays out 26.1% 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.

Earnings & Valuation

This table compares Trend Micro and SAP”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Trend Micro	$1.85 billion	2.97	$231.30 million	$1.76	23.85
SAP	$41.63 billion	6.91	$8.10 billion	$8.19	28.61

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

Risk & Volatility

Trend Micro has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500. Comparatively, SAP has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500.

Institutional and Insider Ownership

0.1% of Trend Micro shares are owned by institutional investors. 7.3% of SAP shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings for Trend Micro and SAP, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trend Micro	0	1	0	1	3.00
SAP	1	7	15	1	2.67

SAP has a consensus price target of $258.38, suggesting a potential upside of 10.28%. Given SAP’s higher possible upside, analysts clearly believe SAP is more favorable than Trend Micro.

Summary

SAP beats Trend Micro on 12 of the 16 factors compared between the two stocks.

About Trend Micro

Trend Micro is a global cybersecurity company that develops software and services to help organizations and individuals protect against digital threats. Its offerings cover endpoint, network, cloud and email security, as well as threat detection and response. The company’s portfolio includes Trend Vision One, a cybersecurity platform that brings together threat detection, investigation and response capabilities, and products for protecting cloud environments and devices. Trend Micro also provides threat intelligence and security services to businesses, governments and consumers.

About SAP

SAP SE is a German enterprise software company headquartered in Walldorf. Founded in 1972, it develops software that helps organizations manage business operations and use data across their operations. Its products and services include enterprise resource planning (ERP) software, cloud applications, database and analytics tools, and solutions for areas such as finance, supply chain management, human resources, procurement, and customer experience. SAP serves businesses and public-sector organizations across the globe.