Updated 3/11/2025
Oracle Corporation (NYSE: ORCL) has been a key player in the tech industry for decades, known for its enterprise software, database management systems, and growing presence in cloud computing. While many view Oracle as a tech growth stock, it has also become a reliable name for dividend investors.
Over the years, Oracle has focused on returning value to shareholders through both dividends and aggressive share buybacks. Its solid cash flow and disciplined approach to capital allocation make it an interesting choice for income-focused investors looking for stability in the tech sector.
Let’s take a deep dive into Oracle’s dividend profile, its financial strength, and whether it fits into a dividend investor’s portfolio.
🔑 Key Dividend Metrics
💰 Dividend Yield: 1.39% (Forward)
📈 5-Year Average Dividend Yield: 1.43%
💵 Forward Annual Dividend: $2.00 per share
📅 Ex-Dividend Date: April 10, 2025
📊 Payout Ratio: 37.56%
🔄 Dividend Growth: Modest, consistent increases
🏦 Cash Flow Strength: $20.75 billion in operating cash flow
Oracle’s dividend yield is on the lower side compared to traditional income stocks, but within the expected range for a large-cap tech company. The payout ratio remains conservative, leaving plenty of room for future increases.
Dividend Overview
Oracle isn’t the kind of stock that income investors turn to for a high-yield payout, but it makes up for that with stability. Right now, its dividend yield sits at 1.39%, which is slightly below its five-year average of 1.43%. While that may suggest the stock is a bit expensive, it also signals consistency.
One key thing to understand about Oracle is that it doesn’t just reward shareholders through dividends—it also aggressively repurchases shares. This buyback strategy has helped boost earnings per share over time, indirectly benefiting long-term investors.
With a payout ratio of 37.56%, the dividend remains well-covered by earnings and cash flow. Oracle has plenty of flexibility to keep increasing payouts while still investing in growth initiatives.
Dividend Growth and Safety
Oracle’s dividend growth has been steady but not spectacular. The company has consistently raised its dividend, though at a moderate pace.
- The dividend has grown consistently over the past five years, albeit at a measured rate.
- The payout ratio remains low, ensuring plenty of room for future hikes.
- With $12.16 billion in net income and $20.75 billion in operating cash flow, dividends are well-supported.
- Buybacks are a priority for Oracle, which can lead to per-share dividend increases even if the total payout remains conservative.
For investors looking for reliable income, Oracle’s dividend is safe. However, those seeking aggressive growth in dividend payouts might find it lacking compared to other dividend-growth stocks.
Chart Analysis
The chart for Oracle (ORCL) is showing some clear signs of weakness after a strong uptrend throughout much of the past year. The price has broken below key technical levels, and momentum indicators suggest that bearish pressure is increasing.
Price Action and Moving Averages
The stock had been in a steady uptrend, with prices consistently riding above the 50-day and 200-day moving averages. However, in recent weeks, the price has fallen sharply, breaking below the 50-day moving average first and now sitting just under the 200-day moving average. This is a significant technical shift, as the 200-day moving average often serves as a long-term support level. When a stock falls below it, it can signal a transition from a bullish trend to a more bearish phase.
Volume and Market Participation
Volume has spiked in certain sessions, particularly during the recent drop, which suggests that selling pressure has intensified. Higher-than-average volume on down days can indicate that institutional investors are offloading shares. If the stock continues to see elevated selling volume, it could mean more downside ahead.
Relative Strength Index (RSI) and Momentum
The RSI is trending lower, now hovering in a weaker range that suggests the stock is losing momentum. While it is not yet at an oversold level, it has steadily declined from the higher levels seen during the stock’s strong run-up. This shows that buyers are stepping back, and there is little immediate strength in the stock. If RSI continues to slide, it could further confirm that downward momentum is still in play.
Recent Candlestick Behavior
Looking at the last few trading sessions, the candlesticks show volatility with long wicks on both the upside and downside. This suggests some indecision in the market, with both buyers and sellers trying to take control. However, the fact that the price continues to close near its lows rather than recovering strongly indicates that the selling pressure is still dominant.
Support and Resistance Levels
The $150 level appeared to be a psychological support level, but the stock has broken below it. If it doesn’t reclaim this level soon, it could turn into resistance, making any bounce weaker. The next significant support could be closer to the $135-$140 range, where the stock had previously consolidated before its breakout last year. If selling pressure continues, this could be the next area where buyers step in.
Analyst Ratings
Oracle Corporation (NYSE: ORCL) has recently seen a mix of analyst upgrades and downgrades, reflecting differing perspectives on its growth potential and challenges.
🔼 Upgrades
📈 Guggenheim maintained a “buy” rating on Oracle, setting a price target of $220. This optimistic stance comes from Oracle’s strong backlog and significant growth in cloud services, particularly in infrastructure-as-a-service, which saw a 49% increase.
🚀 Citigroup upgraded Oracle from “neutral” to “positive,” citing strong cloud expansion and Oracle’s positioning in the AI infrastructure space as key drivers for future revenue growth. Analysts believe the company is well-positioned to capitalize on enterprise cloud adoption and rising AI demand.
🔽 Downgrades
📉 BMO Capital Markets lowered its price target from $205 to $175 while maintaining a “market perform” rating. The revision reflects concerns over Oracle’s recent earnings miss and potential margin pressure due to higher capital expenditures.
⚠️ Monness Crespi Hardt downgraded Oracle to a “sell” rating, pointing to a stretched valuation and increasing competition. Analysts expressed concern over Oracle’s plan to double capital expenditures to $14.2 billion in response to AI-driven demand, noting that the company faces tough competition from Amazon, Microsoft, and Google in cloud infrastructure.
📊 Consensus Outlook
Overall, the consensus among 29 analysts is a “moderate buy” rating, with an average price target of $176.85, indicating a potential 17% upside from the current stock price.
These mixed opinions highlight both the growth opportunities and risks Oracle faces in an evolving tech landscape.
Earnings Report Summary
Oracle’s latest earnings report had a little bit of everything—some strong wins, a few challenges, and a cautious outlook for the months ahead. Revenue came in slightly higher than expected, thanks to solid demand for cloud services and AI-driven infrastructure. But at the same time, higher spending on growth initiatives put some pressure on profitability.
Cloud services continued to be the biggest driver, with subscription-based revenue growing at a healthy pace. The infrastructure-as-a-service business, in particular, saw strong momentum as more companies shifted workloads to Oracle’s cloud. That’s a good sign for long-term stability since recurring revenue helps smooth out the ups and downs of one-time software sales.
Earnings per share matched expectations, but operating margins took a bit of a hit. Oracle has been spending aggressively to expand its AI capabilities and build out data centers, which is a smart move for the future but comes at a cost in the short term. The company is betting big on artificial intelligence playing a major role in enterprise cloud adoption, and that investment is expected to pay off over time.
One thing that stood out in the report was Oracle’s cautious guidance for the next quarter. Management pointed to broader economic uncertainty and currency fluctuations as factors that could create some headwinds. While they still expect strong demand for cloud and AI solutions, they aren’t ignoring the challenges in the current market.
For shareholders, Oracle remained committed to rewarding investors through dividends and stock buybacks. The dividend isn’t the highest out there, but it’s steady and well-supported by cash flow. Meanwhile, buybacks have helped boost earnings per share over time, which is another way the company is returning value to investors.
Overall, the report reinforced what most people already know about Oracle—it’s a solid, profitable company making a big push into AI and cloud computing. The revenue numbers show that strategy is working, but the increased spending and economic uncertainty mean there could be some bumps along the way. The real question is whether these big investments in AI and cloud will translate into stronger profitability in the quarters ahead. Investors will be watching closely to see how that plays out.
Financial Health and Stability
Oracle’s financial position is a mix of strengths and some areas to watch.
Strengths
✅ Strong profitability, with an operating margin of 31.49% and a net profit margin of 21.80%
✅ Exceptionally high return on equity (ROE) at 103.74%, driven by share buybacks and earnings strength
✅ Large cash reserves of $17.82 billion, ensuring liquidity and flexibility
Potential Concerns
⚠️ High debt levels, with total debt of $110.64 billion and a debt-to-equity ratio of 640.98%
⚠️ A low book value per share of $6.17, meaning much of Oracle’s valuation is based on earnings rather than tangible assets
Oracle’s ability to generate strong cash flow helps offset concerns about its debt, but investors should keep an eye on interest costs and how the company manages repayments.
Valuation and Stock Performance
Oracle’s stock has been on a strong upward trend, currently trading at $150.89. Based on valuation metrics, it isn’t the cheapest stock, but for a profitable tech giant, it’s not overly expensive either.
- Trailing P/E of 33.85 and forward P/E of 20.58 suggest the stock is priced for future growth.
- PEG ratio of 1.57 shows a reasonable valuation based on expected earnings expansion.
- Price-to-sales ratio of 7.38 is higher than many traditional dividend stocks but typical for a tech leader.
Oracle’s share price has climbed significantly, and its current dividend yield is below its historical average, which could indicate limited upside for yield-seeking investors.
Risks and Considerations
While Oracle remains a solid, stable company, there are some factors investors should keep in mind.
🔴 The company has a significant amount of debt, and while it can handle payments with its cash flow, any financial strain or rising interest rates could impact profitability.
🔴 Dividend growth has been relatively slow compared to other dividend-growth stocks. Investors looking for aggressive increases may be disappointed.
🔴 Oracle operates in a highly competitive space, facing rivals like Microsoft and Amazon in the cloud computing arena.
🔴 Share buybacks take precedence over dividend increases, meaning investors relying solely on dividend income may not see rapid growth in payouts.
Final Thoughts
Oracle is a reliable dividend stock in the tech sector, offering stability and strong cash flow rather than a high yield. Its conservative payout ratio makes the dividend safe, but it doesn’t provide rapid growth like some other dividend-focused companies.
For investors who value a combination of steady income, strong profitability, and a company committed to returning capital to shareholders, Oracle is an appealing choice. However, those looking for high-yield or fast-rising dividends may want to explore other options.
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