Activision Blizzard (NASDAQ:ATVI – Get Rating) and SAP (NYSE:SAP – Get Rating) are both large-cap consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, earnings, valuation, analyst recommendations, risk, dividends and profitability.
Analyst Ratings
This is a breakdown of current ratings for Activision Blizzard and SAP, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Activision Blizzard | 0 | 0 | 15 | 0 | 3.00 |
| SAP | 2 | 4 | 10 | 0 | 2.50 |
Activision Blizzard presently has a consensus price target of $91.53, indicating a potential upside of 21.67%. SAP has a consensus price target of $120.20, indicating a potential downside of 11.47%. Given Activision Blizzard’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Activision Blizzard is more favorable than SAP.
Dividends
Insider and Institutional Ownership
79.3% of Activision Blizzard shares are owned by institutional investors. Comparatively, 5.2% of SAP shares are owned by institutional investors. 1.1% of Activision Blizzard shares are owned by insiders. Comparatively, 7.4% of SAP shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Profitability
This table compares Activision Blizzard and SAP’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Activision Blizzard | 22.82% | 12.97% | 9.40% |
| SAP | 6.47% | 5.47% | 3.19% |
Risk & Volatility
Activision Blizzard has a beta of 0.42, suggesting that its share price is 58% less volatile than the S&P 500. Comparatively, SAP has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500.
Valuation and Earnings
This table compares Activision Blizzard and SAP’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Activision Blizzard | $7.53 billion | 7.84 | $1.51 billion | $2.35 | 32.01 |
| SAP | $31.54 billion | 5.08 | $2.41 billion | $1.79 | 75.85 |
SAP has higher revenue and earnings than Activision Blizzard. Activision Blizzard is trading at a lower price-to-earnings ratio than SAP, indicating that it is currently the more affordable of the two stocks.
Summary
Activision Blizzard beats SAP on 10 of the 17 factors compared between the two stocks.
About Activision Blizzard
Activision Blizzard, Inc. engages in the development and publication of entertainment content and services. It operates through the following segments: Activision Publishing Inc., Blizzard Entertainment Inc., and King Digital Entertainment. The Activision Publishing Inc. segment delivers content through both premium and free-to-play offerings, as well as by licensing software to third-party or related-party companies that distribute Activision products. The Blizzard Entertainment segment is engaged in delivering content through both premium and free-to-play offerings, and by licensing software to third-party or related-party companies that distribute Blizzard products. The King Digital Entertainment segment is focused on delivering content through free-to-play offerings and generates revenue from in-game sales and in-game advertising on the mobile platform. The company was founded in 1979 and is headquartered in Santa Monica, CA.
About SAP
SAP SE engages in the provision of enterprise application software and software-related services. It operates through the following segments: Applications, Technology, and Support; Qualtrics; and Services. The Applications, Technology, and Services segment includes sale of software licenses, support offerings, and cloud subscriptions. The Qualtrics segment sells experience management cloud solutions. The Services segment offers professional services, premium support services, implementation services for software products, and education services on the use of products. The company was founded by Hasso Plattner, Klaus Tschira, Claus Wellenreuther, Dietmar Hopp, and Hans-Werner Hector in 1972 and is headquartered in Walldorf, Germany.
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