Adobe vs. Autodesk: Which Software Stock is a Better Buy?
A well diversified portfolio should include exposure to the technology sector, including stocks in the software industry. Adobe (ADBE) and Autodesk (A...
A well diversified portfolio should include exposure to the technology sector, including stocks in the software industry. Adobe (ADBE) and Autodesk (ADSK) are two well known-software stocks, but which is currently a better buy? Read more to find out.
A diverse portfolio typically includes tech stocks. However, adding any old tech stock into the mix will not suffice. You also need diversification among your tech holdings in addition to overarching diversification throughout the entire portfolio as a whole.
Take a close look at your portfolio to see how many software stocks you own. You might be surprised to learn you only own one or two companies that primarily specialize in software. It is time to consider the merits of additional software stocks.
Open your mind to the idea of investing in another software stock or two, and you will find a couple emerges from the pack. Two of the more intriguing software stocks to consider is Adobe (ADBE) and Autodesk (ADSK). But which is a better buy? Let's find out.
Headquartered in beautiful San Jose, ADBE is one of the world's largest software businesses. The majority of ADBE's revenue is driven by customer licensing fees. ADB also provides educational services and technical support.
ADBE is currently trading around $605. Its 52-week high is $609.33, and its 52-week low is $416.29. ADBE has a beta of 0.95, which means it's less volatile than the market. ADBE has an overall grade of B, translating into a Buy rating in our POWR Ratings system. The stock has a grade of A in the Quality and Sentiment components. If you would like to find out how ADBE fares in the rest of the components, including Growth, Value, Momentum, and Stability, click here.
ADBE slots in just inside the top 20 stocks in the Software - Application industry, coming in at number 19. You can find other top stocks in this industry by clicking here. Analysts believe ADBE is headed higher as the average analyst price target for the stock is just under $619. Twelve analysts rate the stock and a Strong Buy, and thirteen rate it a Buy.
ADSK develops software for designing, documentation, engineering, and more. ADSK serves clients in construction, engineering, product design, entertainment, digital media, and architecture. ADSK generates revenue through several channels, including cloud services, product subscriptions, training, consulting, renewal fees for maintenance service bought with perpetual software licenses, and more.
While the company raked in nearly $3.8 billion of revenue in fiscal 2021, it currently has an overall grade of C and a Neutral rating in our POWR Ratings system. The company has grades of C in the Growth, Value, and Momentum components. Click here to find out how ADSK fares in the rest of the components, including Sentiment, Stability, and Quality.
ADSK is ranked 35th of 131 stocks in the Software - Application industry. The company has a forward P/E ratio of 60.50, which is high, and a beta of 1.33, indicating it is more volatile than the market.
Which is the Better Buy?
ADBE is currently the better Buy. Both stocks are in the same industry, but ADBE ranks higher and not only has a better overall grade but better component grades as well.
ADBE shares were trading at $608.63 per share on Wednesday afternoon, up $3.62 (+0.60%). Year-to-date, ADBE has gained 21.70%, versus a 17.44% rise in the benchmark S&P 500 index during the same period.
Adobe (ADBE) is a part of the Entrepreneur Index, which tracks some of the largest publicly traded companies founded and run by entrepreneurs.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management.Adobe vs. Autodesk: Which Software Stock is a Better Buy? appeared first on StockNews.com
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