Last month, Oracle decided to use its hefty cash flow and powerful brand name to muscle its way into the sector. The software leader recently announced three cloud-computing partnerships that may allay investor fears. Perhaps the most intriguing of these partnerships is between Oracle and rival salesforce.com, inc. (NYSE:CRM). This could turn out to be quite lucrative for both companies, as Oracle gains a high-profile market for some of its second-tier products (such as the Exadata data management platform), and salesforce.com, inc. (NYSE:CRM) gets a very committed partner for its back-end operations.
Oracle’s also partnered with NetSuite Inc (NYSE:N) and Microsoft Corporation (NASDAQ:MSFT). The NetSuite partnership will see Oracle combine its human capital management software — which allows businesses to streamline human resources operations — with NetSuite Inc (NYSE:N)’s enterprise resource planning software, which businesses use to coordinate the management of information between a company and its stakeholders. These combined applications should be available by the end of this year. Oracle’s partnership with Microsoft, on the other hand, focuses primarily on its Java software suite, which it will license to Microsoft Corporation (NASDAQ:MSFT) for use in its existing cloud-based services in conjunction with Oracle’s other software tools.
Oracle also recently announced the purchase of up to $12 billion of its own shares. Another big investor-side boost involves the doubling of its dividend. Despite that payout bump, Oracle is still scheduled to pay out only 17% of its projected 2014 EPS (and less in free cash flow terms), leaving the company plenty of room to raise its dividend again without taking away precious cash flow required to boost its all-important research spending.
Putting the pieces together
Today, Oracle has many of the qualities that make up a great stock, but no stock is truly perfect. Digging deeper can help you uncover the answers you need to make a great buy — or to stay away from a stock that’s going nowhere.
The article Is Oracle Destined for Greatness? originally appeared on Fool.com.
Fool contributor Alex Planes has no position in any stocks mentioned. The Motley Fool recommends Netsuite and salesforce.com and owns shares of Microsoft and Oracle.
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