Critical Contrast: Oracle (NYSE:ORCL) & Trend Micro (OTCMKTS:TMICY)

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

Risk and Volatility

Oracle has a beta of 1.64, indicating that its stock price is 64% more volatile than the S&P 500. Comparatively, Trend Micro has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Oracle and Trend Micro, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oracle	1	11	26	3	2.76
Trend Micro	0	0	0	0	0.00

Oracle currently has a consensus target price of $292.43, indicating a potential upside of 86.33%. Given Oracle’s stronger consensus rating and higher probable upside, equities analysts plainly believe Oracle is more favorable than Trend Micro.

Institutional and Insider Ownership

42.4% of Oracle shares are held by institutional investors. Comparatively, 0.1% of Trend Micro shares are held by institutional investors. 40.9% of Oracle shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Oracle	25.28%	70.60%	9.22%
Trend Micro	12.78%	29.95%	9.11%

Valuation & Earnings

This table compares Oracle and Trend Micro”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oracle	$57.40 billion	7.86	$12.44 billion	$5.32	29.50
Trend Micro	$1.80 billion	2.90	$226.77 million	$1.78	20.88

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

Dividends

Oracle pays an annual dividend of $2.00 per share and has a dividend yield of 1.3%. Trend Micro pays an annual dividend of $0.95 per share and has a dividend yield of 2.6%. Oracle pays out 37.6% of its earnings in the form of a dividend. Trend Micro pays out 53.4% 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. Oracle has raised its dividend for 1 consecutive years.

Summary

Oracle beats Trend Micro on 17 of the 18 factors compared between the two stocks.

About Oracle

Oracle Corporation offers products and services that address enterprise information technology environments worldwide. Its Oracle cloud software as a service offering include various cloud software applications, including Oracle Fusion cloud enterprise resource planning (ERP), Oracle Fusion cloud enterprise performance management, Oracle Fusion cloud supply chain and manufacturing management, Oracle Fusion cloud human capital management, Oracle Cerner healthcare, Oracle Advertising, and NetSuite applications suite, as well as Oracle Fusion Sales, Service, and Marketing. The company also offers cloud-based industry solutions for various industries; Oracle application licenses; and Oracle license support services. In addition, it provides cloud and license business' infrastructure technologies, such as the Oracle Database and MySQL Database; Java, a software development language; and middleware, including development tools and others. The company's cloud and license business' infrastructure technologies also comprise cloud-based compute, storage, and networking capabilities; and Oracle autonomous database, MySQL HeatWave, Internet-of-Things, digital assistant, and blockchain. Further, it provides hardware products and other hardware-related software offerings, including Oracle engineered systems, enterprise servers, storage solutions, industry-specific hardware, virtualization software, operating systems, management software, and related hardware services; and consulting and customer services. The company markets and sells its cloud, license, hardware, support, and services offerings directly to businesses in various industries, government agencies, and educational institutions, as well as through indirect channels. The company has a collaboration with Amdocs Limited to empower customers on their journey towards cloud and digital adoption. Oracle Corporation was founded in 1977 and is headquartered in Austin, Texas.

About Trend Micro

Trend Micro Incorporated develops and sells security-related software for computers and related services in Japan and internationally. The company offers platforms, such as vision one platform, attack surface management, extended detection and response (XDR), cloud security, endpoint security, network security, email security, OT/ICS security, and threat intelligence. It also provides services packages, managed XDR, incident response, and support services. Additionally, the company serves 5G networks, healthcare, manufacturing, oil and gas, electric utility, and automotive industries. The company was incorporated in 1965 and is headquartered in Tokyo, Japan.