IBM vs Infosys

IBM and Infosys are two major players in the technology industry with strong footholds in the stock market. While IBM has been a stalwart in the industry for many years, Infosys has emerged as a leading global IT consulting and services company. Both companies have experienced significant growth in recent years, with their stocks attracting the attention of investors. In this comparison, we will delve into the financial performance, market trends, and future prospects of IBM and Infosys stocks to provide valuable insights for potential investors.

IBM or Infosys?

When comparing IBM and Infosys, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between IBM and Infosys.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. IBM has a dividend yield of 2.86%, while Infosys has a dividend yield of 2.4%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. IBM reports a 5-year dividend growth of 1.32% year and a payout ratio of 72.25%. On the other hand, Infosys reports a 5-year dividend growth of -5.23% year and a payout ratio of 55.45%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with IBM P/E ratio at 25.43 and Infosys's P/E ratio at 29.73. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. IBM P/B ratio is 8.92 while Infosys's P/B ratio is 9.57.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, IBM has seen a 5-year revenue growth of -0.22%, while Infosys's is 0.65%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with IBM's ROE at 36.30% and Infosys's ROE at 32.17%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $232.71 for IBM and $22.97 for Infosys. Over the past year, IBM's prices ranged from $135.87 to $237.35, with a yearly change of 74.69%. Infosys's prices fluctuated between $16.04 and $23.48, with a yearly change of 46.38%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.