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Oracle Stock Price Is Still In The Buying Territory

Oracle (NASDAQ: ORCL) stock price is one of the best performers in the software industry. Its share price grew from $42 at the beginning of this year to a 52-weeks high of $60 a share. The stock is trading around $56 at present. The company’s cloud computing push is among the biggest drivers of share price rally in the past couple of months.

In addition, the company’s strategy of returning cash to investors is contributing to bullish sentiments. The company has returned $1.2 billion to investors in the latest quarter through dividends and share buybacks. Moreover, Oracle stock price is trading at attractive valuations compared to the industry average.

ORCL Oracle Corporation daily Stock Chart

Cloud Computing Push Supports Share Price

Tech giants all over the world are capitalizing on increasing demand from the cloud. Oracle has also been investing aggressively to expand its market share in the emerging business.

It has recently announced a plan to hire 2,000 additional workers to expand its cloud computing services. The company also plans to open 20 more cloud regions in the coming years to operate data centers.

The company had experienced significant growth in cloud revenues. Its cloud ERP business revenue rose 33% year over year in the latest quarter. ORCL attained more than 6,500 Fusion ERP customers while NetSuite ERP customers stood around 18,000.

Its earnings growth potential remains strong. The company generated year over year earnings growth of 14% in the latest quarter. The CEO says, “We’re off to a good start in FY20, and we expect this to be our 3rd consecutive year of double-digit non-GAAP earnings per share growth.”

Cash Returns Are Enhancing Sentiments

The company announced a huge share buyback program of $15 billion. Share buyback plans always enhance earnings per share, dividends and share price. On the other hand, it also announced a dividend increase of 26.3% to $0.24 per share. ORCL currently offers a dividend yield of 1.7%. Market pundits believe Oracle stock price is still presenting a buying opportunity for value and dividend investors.

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Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.