SAP (NYSE:SAP) versus Dassault Systemes (OTCMKTS:DASTY) Critical Comparison

SAP (NYSE:SAP) and Dassault Systemes (OTCMKTS:DASTY) are both large-cap computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, profitability, dividends, earnings, institutional ownership and risk.

Risk and Volatility

SAP has a beta of 1.18, suggesting that its stock price is 18% more volatile than the S&P 500. Comparatively, Dassault Systemes has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500.

Profitability

This table compares SAP and Dassault Systemes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SAP	19.92%	16.54%	10.28%
Dassault Systemes	19.27%	18.31%	10.63%

Institutional & Insider Ownership

0.0% of Dassault Systemes shares are owned by institutional investors. 7.4% of SAP shares are owned by 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 Recommendations

This is a breakdown of current ratings for SAP and Dassault Systemes, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SAP	0	5	12	3	2.90
Dassault Systemes	0	3	0	1	2.50

SAP presently has a consensus target price of $305.75, indicating a potential upside of 52.68%. Given SAP’s stronger consensus rating and higher probable upside, equities research analysts plainly believe SAP is more favorable than Dassault Systemes.

Valuation and Earnings

This table compares SAP and Dassault Systemes”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SAP	$36.80 billion	6.68	$8.10 billion	$7.05	28.40
Dassault Systemes	$7.05 billion	4.15	$1.35 billion	$1.01	21.62

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

Dividends

SAP pays an annual dividend of $1.84 per share and has a dividend yield of 0.9%. Dassault Systemes pays an annual dividend of $0.22 per share and has a dividend yield of 1.0%. SAP pays out 26.1% of its earnings in the form of a dividend. Dassault Systemes pays out 21.8% 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. Dassault Systemes is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

SAP beats Dassault Systemes on 12 of the 17 factors compared between the two stocks.

About SAP

SAP SE, together with its subsidiaries, provides applications, technology, and services worldwide. It offers SAP S/4HANA that provides software capabilities for finance, risk and project management, procurement, manufacturing, supply chain and asset management, and research and development; SAP SuccessFactors solutions for human resources, including HR and payroll, talent and employee experience management, and people and workforce analytics; and spend management solutions that covers direct and indirect spend, travel and expense, and external workforce management. The company also provides SAP customer experience solutions; SAP Business Technology platform that enables customers and partners to build, integrate, and automate applications; and SAP Business Network, a business-to-business collaboration platform that helps digitalize key business processes across the supply chain and enables communication between trading partners. In addition, it offers SAP Signavio to help customers to discover, analyze, and understand their business process operations; SAP's industry cloud solutions that provides modular solutions addressing industry-specific functions; Taulia solutions for working capital management to help enable customers mitigate the effects of inflation by providing visibility into working capital and access to liquidity; and sustainability solutions and services. SAP SE was founded in 1972 and is headquartered in Walldorf, Germany.

About Dassault Systemes

Dassault Systèmes SE provides software solutions and services worldwide. It offers SOLIDWORKS provides easy-to-use 2D and 3D product development solutions accessible to any business; CATIA, an engineering and design software for product 3D computer-aided design; GEOVIA for intersection of natural resources, infrastructure, and urban planning; and BIOVIA that develops chemicals, biologics, and materials experiences. The company provides SIMULIA that delivers realistic simulation applications; DELMIA, which enables global industrial operations; 3DVIA that provides 3D space planning solutions; and ENOVIA that enables to plan and track the definition of success for customer. In addition, it offers Centric PLM, a product lifecycle management software solution; 3DEXCITE, a real-time 3D visualization software; NETVIBES, which enables organizations to gather, align, and enrich big data; 3DEXPERIENCE platform that provides organizations a holistic and real-time view of their business activities and ecosystem, as well as connecting people, ideas, data, and solutions together in a single environment; and MEDIDATA, a clinical research study software that provides evidences and insights to pharmaceutical, biotech, medical device, and diagnostic companies, as well as academic researchers. The company distributes its products through direct and indirect sales channels. It primarily serves companies in the transportation and mobility; industrial equipment; aerospace and defense; high-tech; life sciences and healthcare; infrastructure, energy, and materials; home and lifestyle; architecture, engineering, and construction; cities, and public services; consumer packaged goods and retail; marine and offshore; and business services. Dassault Systèmes SE was incorporated in 1981 and is headquartered in Vélizy-Villacoublay, France.