Value, Dividends and Top-Tier Tech Make Oracle an Easy Choice
InvestorPlace - Stock Market News, Stock Advice & Trading Tips Is ORCL stock expensive? The share price has certainly moved higher, yet there are...
If you want to be a winner in the financial markets, placing your bets on technology leaders like Oracle (NYSE:ORCL) isn’t a bad idea at all. History shows that folks who “set it and forget it” with ORCL stock tend to do well over time.
On the other hand, some value-focused investors might be concerned that Oracle’s investors have pushed the share price too high. With that in mind, it may be tempting to wait for a deep correction before taking a long position.
The thing about waiting for deep price corrections is that you’ll be paying an opportunity cost. ORCL stock could easily continue on its upward trajectory, leaving the skeptics behind.
Besides, Oracle shares aren’t necessarily expensive, even after a strong rally in the stock price. A closer look at the stock, and at the company itself, should reveal a tech-sector bargain that’s hard to resist.
ORCL Stock at a Glance
So, let’s see if ORCL stock is really as pricey as it might seem. There’s no denying the upward momentum, as the share price has moved from $57 a year ago to almost $90 today.
That’s pretty impressive share-price appreciation, no doubt. Momentum-focused traders should see a lot of potential here. But what about value investors? Are they left in the lurch here?
Not at all. Even after the relentless rally in ORCL stock, Oracle’s trailing-12-month price-to-earnings ratio is just 19.64. For a technology company that’s not an alarming P/E ratio at all. Therefore, valuation concerns appear to be unfounded.
Income-seeking investors also have something to look forward to with ORCL stock. Oracle pays out a forward annual dividend yield of 1.4%.
This is just another incentive for patient investors to buy some Oracle shares and simply hold them for a long time.
Still a Cloud Leader
Not long ago, I featured Oracle as a premier cloud services provider.
I acknowledged that Oracle currently has small share of the cloud services market. However, there’s a prime opportunity for growth here, as Oracle’s working hard to acquire more business in this sector.
Moreover, I cited Oracle Cloud’s recently reported annualized revenue of more than $2 billion. Plus, the company is preparing to allocate another $4 billion in capital expenditures on Oracle Cloud infrastructure.
On top of all that, in August Oracle announced the rollout of an upgrade to its MySQL HeatWave service, known as MySQL Autopilot. This will reportedly be available on the Oracle Cloud Infrastructure platform “on all 30 Oracle cloud regions.”
Clearly, Oracle is getting serious about the cloud. Recognizing this, smart finance start-up W1TTY plans to utilize the Oracle Banking suite, running on Oracle Cloud Infrastructure, to provide a better experience for its customers.
Providing Support, Globally
W1TTY founder and CEO Ammar Kutait emphasized how Oracle’s cloud-enhanced tools should fit seamlessly within his company’s technology road map.
“This new platform integrated with multiple systems to offer a full stack of finance applications that will help W1TTY enhance the mobile financial experience for our customers,” Kutait explained.
It’s indisputable that Oracle’s tech-augmented services are in high demand. And of course, W1TTY isn’t the only willing collaborator.
Just recently, Oracle announced that it will add support for India to its Oracle Fusion Cloud Payroll service. This service is part of part of the Oracle Fusion Cloud Human Capital Management (HCM) suite of tools. The addition of Payroll for India will allow Oracle Cloud HCM to provide built-in payroll support for a total of 10 countries.
Furthermore, it could be a major revenue generation opportunity as India. With nearly 500 million workers, it is one of the largest business markets in the world.
Chris Leone, senior vice president of development, Oracle Cloud HCM, even noted a cloud tie-in with the India expansion.
“Many of India’s largest employers use our cloud HR software, so we’re delivering new offerings that are specific to India to help customers grow their business,” Leone clarified.
As you can see, ORCL stock has something to appeal to dividend collectors, value seekers and growth investors. There’s something for practically any investor here — except maybe a few skeptics who aren’t necessarily looking at the big picture.
But, you don’t have to worry about the naysayers. Oracle’s progress is evident, and loyal investors should continue to enjoy strong, consistent returns.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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