Would SAP AG (ADR) (SAP) Steal Database Market Share From Oracle Corporation (ORCL)?

Bottom line

SAP AG (ADR) (NYSE:SAP)’s database growth of more than 60% would not come unnoticed. The stock, which is down 3% this year, could get a boost when investors find out that the database story is for real. Oracle Corporation (NASDAQ:ORCL) is most threatened by SAP’s movements. Its stock has been an underperformer this year, up only 1% year-to-date. In comparison to SAP’s 19.47 forward P/E, Oracle trades at a more attractive 11.58 P/E. However, if the company starts to lose market share on its main products, earnings estimates would change and hurt the stock.

IBM and Microsoft are more attractive from an income perspective. IBM’s dividend yields 1.84%, while Microsoft’s dividend yields 2.58%. IBM trades at 11.25 forward P/E, while Microsoft trades at 11.66 forward P/E. The momentum is clearly on Microsoft’s side, with its stock up 35% this year, while IBM has gained only 9%.

SAP and Microsoft are the most attractive investments. SAP presents opportunities for future growth, while Microsoft shows good momentum in the present.

Vladimir Zernov has no position in any stocks mentioned. The Motley Fool owns shares of International Business Machines (NYSE:IBM)., Microsoft, and Oracle. Vladimir is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Would SAP Steal Database Market Share From Oracle? originally appeared on Fool.com and is written by Vladimir Zernov.

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