Comparing Sabre Corporation (SABR) and Electronic Arts (EA)

Sabre Corporation (NASDAQ: SABR) and Electronic Arts (NASDAQ:EA) are both mid-cap computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, risk, profitability, valuation, analyst recommendations, dividends and institutional ownership.

Earnings and Valuation

This table compares Sabre Corporation and Electronic Arts’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sabre Corporation $3.48 billion 1.46 $719.33 million $0.48 37.96
Electronic Arts $5.02 billion 6.99 $1.58 billion $3.74 30.38

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

Dividends

Sabre Corporation pays an annual dividend of $0.56 per share and has a dividend yield of 3.1%. Electronic Arts does not pay a dividend. Sabre Corporation pays out 116.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Sabre Corporation and Electronic Arts’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sabre Corporation 3.87% 46.16% 5.43%
Electronic Arts 23.31% 29.77% 15.74%

Risk & Volatility

Sabre Corporation has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500. Comparatively, Electronic Arts has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for Sabre Corporation and Electronic Arts, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sabre Corporation 1 2 6 0 2.56
Electronic Arts 0 3 22 0 2.88

Sabre Corporation presently has a consensus target price of $22.63, suggesting a potential upside of 24.18%. Electronic Arts has a consensus target price of $121.10, suggesting a potential upside of 6.58%. Given Sabre Corporation’s higher possible upside, analysts plainly believe Sabre Corporation is more favorable than Electronic Arts.

Insider and Institutional Ownership

93.8% of Electronic Arts shares are held by institutional investors. 1.8% of Sabre Corporation shares are held by company insiders. Comparatively, 2.6% of Electronic Arts shares are held 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

Electronic Arts beats Sabre Corporation on 12 of the 16 factors compared between the two stocks.

About Sabre Corporation

Sabre Corporation is a technology solutions provider to the global travel and tourism industry. The Company provides software and services to a range of travel suppliers and travel buyers. The Company operates through two business segments: Travel Network, and Airline and Hospitality Solutions. Travel Network is its global business-to-business travel marketplace and consists primarily of its global distribution system (GDS) and a set of solutions that integrate with its GDS to serve travel suppliers and travel buyers. Its Airline and Hospitality Solutions business offers a portfolio of software technology products and solutions, through software-as-a-service (SaaS) and hosted delivery model, to airlines, hoteliers and other travel suppliers. The Company connects travel suppliers, including airlines, hotels, car rental brands, rail carriers, cruise lines and tour operators, with travel buyers in a travel marketplace.

About Electronic Arts

Electronic Arts Inc. develops, markets, publishes and distributes games, content and services that can be played by consumers on a range of platforms, which include consoles, personal computers (PCs), mobile phones and tablets. The Company’s games and services are based on a portfolio of intellectual property that includes established brands, such as FIFA, Madden NFL, Star Wars, Battlefield, the Sims and Need for Speed. The Company markets and sells its games and services through retail channels and through digital distribution channels. The Company’s PC games and additional content can be downloaded directly through its Origin online platform, as well as through third-party online download stores. Its mobile, tablet and PC free-to-download games and additional content are available through third-party application storefronts, such as the Apple Application Store and Google Play.

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