Critical Analysis: SAP SE (NYSE:SAP) vs. The Descartes Systems Group (DSGX)

SAP SE (NYSE: SAP) and The Descartes Systems Group (NASDAQ:DSGX) are both mid-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, institutional ownership, profitability and risk.

Risk & Volatility

SAP SE has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, The Descartes Systems Group has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500.

Valuation and Earnings

This table compares SAP SE and The Descartes Systems Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
SAP SE $27.36 billion 4.59 $6.82 billion $3.11 33.70
The Descartes Systems Group $209.38 million 9.74 $70.06 million $0.33 81.37

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

Analyst Ratings

This is a summary of current ratings for SAP SE and The Descartes Systems Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SAP SE 1 4 12 0 2.65
The Descartes Systems Group 0 2 7 0 2.78

SAP SE currently has a consensus price target of $96.27, indicating a potential downside of 8.15%. The Descartes Systems Group has a consensus price target of $30.63, indicating a potential upside of 14.06%. Given The Descartes Systems Group’s stronger consensus rating and higher probable upside, analysts plainly believe The Descartes Systems Group is more favorable than SAP SE.

Dividends

SAP SE pays an annual dividend of $0.98 per share and has a dividend yield of 0.9%. The Descartes Systems Group does not pay a dividend. SAP SE pays out 31.5% of its earnings in the form of a dividend.

Institutional & Insider Ownership

3.7% of SAP SE shares are owned by institutional investors. Comparatively, 77.4% of The Descartes Systems Group shares are owned by institutional investors. 7.4% of SAP SE shares are owned by company insiders. Comparatively, 0.3% of The Descartes Systems Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares SAP SE and The Descartes Systems Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SAP SE 14.81% 14.28% 8.20%
The Descartes Systems Group 11.80% 5.78% 4.99%

Summary

SAP SE beats The Descartes Systems Group on 10 of the 16 factors compared between the two stocks.

SAP SE Company Profile

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.

The Descartes Systems Group Company Profile

Descartes Systems Group Inc (Descartes) is a Canada-based global provider of federated network and global logistics technology solutions that help its customers make and receive shipments and manage related resources. The Company’s network-based solutions, which primarily consist of services and software, connect people to their trading partners and enable business document exchange (bookings, bills of lading, status messages); regulatory compliance and customs filing; route and resource planning, execution and monitoring; access and leverage global trade and restricted party data; inventory and asset visibility; rate and transportation management, and warehouse operations. The Company’s solutions include Logistics Technology Platform that fuses the Descartes Global Logistics Network (Descartes GLN); customs and regulatory compliance; routing, mobile and telematics; global logistics network services; transportation management, and broker and forwarder enterprise systems.

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