Today’s Stock of the Week is a global company that helps other companies manage their finances, human resources, marketing and more.
SAP S.E. (SAP) is an innovative company involved with enterprise software. Enterprise software is used by companies of all sorts to track and analyze their businesses and make adjustments in real time. The company’s clients span a great variety of industries—asset management, commerce, finance, human resources, manufacturing, marketing, sales, sourcing and procurement. SAP also is a leader in transitioning companies’ storage needs from in-house servers to the Cloud, increasing capacity and speed of access while lowering infrastructure costs. This is a growing field worldwide.
SAP is headquartered in Walldorf, Germany, and gets about 33% of its revenue from the US…31% from Europe, the Middle East and Africa…13% from Germany…8% from the Americas outside the US…3% from Japan…and 12% from the rest of Asia. Revenue was $22.29 billion in 2015 and should be $23.64 billion for 2016 and $25.58 billion for 2017. Sixty-four percent of revenue is recurring because SAP customers buy maintenance contracts and pay for regular software upgrades. SAP is continuing to gain market share as it rolls out the latest version of its proprietary resource-planning product, S/4 HANA. Its dividend of $1.31/ADR (American Depositary Receipt)/yr. recently yielded 1.5% and appears secure.
Earnings per ADR: 2017 est./$4.92… 2016 est./$4.27… 2015/$4.23.
This Week’s Expert
Jennifer D. Miller is international equity portfolio manager at J.M. Hartwell LP, New York City, which manages $495 million. JMHartwell.com