3. Oracle Corporation (NYSE:ORCL)
3-Year Share Price Gains as of December 4: 111.7%
Oracle Corporation (NYSE:ORCL) ranks third on our list of the best dividend knights. The computer software company is renowned for its high-quality data center infrastructure, which is essential for AI development, and demand for its services is far exceeding supply. Known for its cost-efficient operations, the company has become a preferred choice for leading AI start-ups like OpenAI, Cohere, and Elon Musk’s xAI. Despite its efforts, it struggles to meet demand, with 162 data centers currently operational or under construction as of the first quarter of fiscal 2025. Oracle aims to significantly expand this number to between 1,000 and 2,000 in the future. In the past three years, ORCL has significantly outperformed the market, returning nearly 112%.
Oracle Corporation (NYSE:ORCL) is preparing to release its fiscal Q2 2025 earnings. Ahead of that, it’s worth revisiting the company’s strong performance in Q1, where it delivered impressive results. In Q1, the company reported revenue of $13.3 billion, which grew by 6.86% from the same period last year. Its Cloud revenue saw a huge increase of 21% on a YoY basis at $5.6 billion. The highlight of the quarter was Oracle’s announcement of a MultiCloud agreement with AWS. This partnership includes the company’s advanced Exadata hardware and the latest Version 23ai of its database software, integrated directly into AWS cloud data centers. Once the service launches in December, AWS customers will have seamless access to the Oracle database.
Mar Vista Investment Partners, LLC also highlighted Oracle Corporation (NYSE:ORCL)’s could business in its Q3 2024 investor letter. Here is what the firm said:
“Oracle Corporation (NYSE:ORCL) is seeing revenue acceleration as it benefits from several years of investing in cloud-based solutions, which are now driving demand. The company is seeing broad-based demand for multiple of its cloud offerings, including its Fusion ERP Suite, its NetSuite offering and the Oracle Database. In addition to those anchor products, Oracle is also gaining traction with its OCI Gen 2 platform-as-a-service offering, which is winning mindshare from leading cloud customers, including Open AI, due to its favorable performance and cost metrics. This OCI Gen 2 solution is well-positioned to become a viable hyper scaler offering, furthered by Oracle’s recently announced partnerships with Microsoft Azure, Google Compute Platform, and Amazon’s AWS, which have all agreed to host Oracle’s flagship database in their respective hyper-scaler cloud environments. We believe this could support a third leg of growth for Oracle as its large installed base of database customers shift from on-premises to cloud deployments. As database customers migrate to a Cloud subscription model, Oracle could increase database software support revenues by 3-to-5 times. We continue to believe Oracle is well-positioned to grow intrinsic value strong double-digits over our investment horizon.”
Oracle Corporation (NYSE:ORCL) has a strong history of paying dividends to shareholders. The company has been making regular dividend payments to shareholders since 2009. Its consistent dividend payouts are supported by a robust cash position. In FY23, the company generated $19.1 billion in operating cash flow and its free cash flow came in at $11.3 billion. It currently offers a quarterly dividend of $0.40 per share and has a dividend yield of 0.83%, as of December 5.
As of the end of Q3 2024, 91 hedge funds tracked by Insider Monkey held stakes in Oracle Corporation (NYSE:ORCL), compared with 93 in the previous quarter. The total value of these stakes is more than $7 billion.
