Altair Engineering (NASDAQ:ALTR) and SAP (NYSE:SAP) are both construction companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, institutional ownership, dividends, risk, profitability, analyst recommendations and valuation.

Analyst Ratings

This is a summary of recent ratings for Altair Engineering and SAP, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Altair Engineering 4 2 2.33
SAP 7 7 2.50

Altair Engineering presently has a consensus price target of $39.14, indicating a potential downside of 5.46%. SAP has a consensus price target of $110.86, indicating a potential downside of 11.05%. Given Altair Engineering’s higher possible upside, equities analysts clearly believe Altair Engineering is more favorable than SAP.

Institutional & Insider Ownership

38.5% of Altair Engineering shares are held by institutional investors. Comparatively, 4.8% of SAP shares are held by institutional investors. 29.3% of Altair Engineering shares are held by insiders. Comparatively, 7.4% of SAP shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Altair Engineering and SAP’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Altair Engineering $396.38 million 7.43 $13.72 million $0.37 111.89
SAP $29.18 billion 5.25 $4.82 billion $4.53 27.51

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

Risk & Volatility

Altair Engineering has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500. Comparatively, SAP has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500.

Dividends

SAP pays an annual dividend of $1.20 per share and has a dividend yield of 1.0%. Altair Engineering does not pay a dividend. SAP pays out 26.5% of its earnings in the form of a dividend. SAP has raised its dividend for 2 consecutive years.

Profitability

This table compares Altair Engineering and SAP’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Altair Engineering 2.62% 11.56% 6.19%
SAP 11.95% 15.18% 8.20%

Summary

SAP beats Altair Engineering on 10 of the 17 factors compared between the two stocks.

Altair Engineering Company Profile

Altair Engineering Inc., together with its subsidiaries, provides software and cloud solutions worldwide. The company operates through two segments, Software and Client Engineering Services. Its integrated suite of multi-disciplinary computer aided engineering software optimizes design performance across various disciplines, including structures, motion, fluids, thermal management, electromagnetics, system modeling and embedded systems. The company offers software products in the areas of design, modeling, visualization; physics simulation; data intelligence; cloud computing; and Internet of Things for decision making in product design and development, manufacturing, energy management and exploration, financial services, health care, and retail operations. It also provides consulting, training, and implementation services; and client engineering services to support customers with ongoing product design and development services. The company was founded in 1985 and is headquartered in Troy, Michigan.

SAP Company Profile

SAP SE operates as an enterprise application software, and analytics and business intelligence company worldwide. The company operates through three segments: Applications, Technology & Services; SAP Business Network; and Customer Experience. It offers SAP HANA, which enables businesses to process and analyze live data; SAP Data Hub, a solution for businesses to manage data from various sources; and SAP Cloud platform that offers an enterprise platform-as-a-service. The company also provides SAP Leonardo, a system that combines design thinking services with intelligent technologies for business processes; SAP Analytics Cloud, which leverages the intersection of business intelligence, planning, and predictive analytics; SAP BW/4HANA, a data warehouse solution; SAP S/4HANA, an enterprise resource planning suite for intelligent enterprises; SAP Integrated Business Planning solutions that deliver real-time supply chain planning capabilities; and SAP Business One, an on-premise and cloud business application. In addition, it offers SAP Fiori, an user experience interface; SAP SuccessFactors Human Capital Management solutions that help organizations enhance the value of their workforce; SAP Fieldglass, a cloud-based application for external workforce management and services procurement; SAP Ariba, an online business-to-business marketplace; and SAP Concur, a travel and expense management software. Further, the company provides SAP MaxAttention to turn ideas into value-based predictable outcomes; and SAP ActiveAttention program, a premium-level engagement solution to support smaller businesses. Additionally, it offers SAP Enterprise Support services that provides proactive, predictive, and preventive support for customers across hybrid landscapes; and SAP Preferred Success, which provides a bundle of prescriptive customer success activities for accelerated cloud adoption. SAP SE was founded in 1972 and is headquartered in Walldorf, Germany.



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