Analyzing Bandwidth (BAND) and Oracle (ORCL)

Oracle (NYSE:ORCL) and Bandwidth (NASDAQ:BAND) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, risk, institutional ownership, valuation, analyst recommendations and dividends.

Profitability

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

Net Margins Return on Equity Return on Assets
Oracle 27.14% 34.03% 9.66%
Bandwidth 8.78% 2.14% 1.56%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Oracle and Bandwidth, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Oracle 3 17 6 0 2.12
Bandwidth 0 1 4 0 2.80

Oracle presently has a consensus target price of $52.42, suggesting a potential downside of 4.04%. Bandwidth has a consensus target price of $63.20, suggesting a potential downside of 9.71%. Given Oracle’s higher probable upside, research analysts plainly believe Oracle is more favorable than Bandwidth.

Earnings & Valuation

This table compares Oracle and Bandwidth’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Oracle $39.83 billion 5.68 $3.83 billion $2.82 19.37
Bandwidth $204.11 million 6.84 $17.92 million $0.31 225.81

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

Dividends

Oracle pays an annual dividend of $0.96 per share and has a dividend yield of 1.8%. Bandwidth does not pay a dividend. Oracle pays out 34.0% of its earnings in the form of a dividend. Oracle has increased its dividend for 7 consecutive years.

Volatility and Risk

Oracle has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500. Comparatively, Bandwidth has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500.

Insider & Institutional Ownership

47.4% of Oracle shares are owned by institutional investors. Comparatively, 42.8% of Bandwidth shares are owned by institutional investors. 32.0% of Oracle shares are owned by company insiders. Comparatively, 48.6% of Bandwidth shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Oracle beats Bandwidth on 12 of the 17 factors compared between the two stocks.

About Oracle

Oracle Corporation develops, manufactures, markets, sells, hosts, and supports application, platform, and infrastructure solutions for information technology (IT) environments worldwide. The company provides services in three primary layers of the cloud: Software as a Service, Platform as a Service, and Infrastructure as a Service. It offers human capital and talent management, enterprise resource planning, customer experience and relationship management, procurement, supply chain management, project portfolio management, business analytics and enterprise performance management, and industry-specific application software, as well as financial management and governance, and risk and compliance applications. The company also licenses its Oracle Database for storage, retrieval, and manipulation of data; and Oracle Fusion Middleware software to build, deploy, secure, access, extend, and integrate business applications, as well as automate business processes. In addition, it provides a range of development tools, identity management, and business analytics software solutions for mobile computing development to address the development needs of businesses; Java, a software development language; and big data solutions. Further, the company provides Oracle Engineered Systems, servers, storage, industry-specific hardware, and hardware support products, as well as operating systems, virtualization, management, and other hardware-related software. Additionally, it provides consulting services, including IT strategy alignment, enterprise architecture planning and design, initial software implementation and integration, application development and integration, security assessments, and ongoing software enhancements and upgrade services; and customer support and education services. The company serves businesses, government agencies, educational institutions, and resellers. Oracle Corporation was founded in 1977 and is headquartered in Redwood City, California.

About Bandwidth

Bandwidth Inc. operates as a cloud-based software-powered communications platform-as-a-service (CPaaS) provides in the United States. The company operates through two segments, CPaaS and Other. Its platform enables enterprises to create, scale, and operate voice or text communications services across mobile application or connected device. The company also provides SIP trunking, data resale, and hosted voice over Internet protocol services. It serves large enterprises, small and medium-sized businesses, technology companies, and other business. Bandwidth Inc. was founded in 2000 and is headquartered in Raleigh, North Carolina.

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