IBM vs Mphasis Which Outperforms?

IBM and Mphasis are two prominent players in the information technology and services industry. While IBM is a well-established multinational company with a long history of technological innovations, Mphasis is a rapidly growing IT services provider. Both companies are listed on the stock market and have been attracting investors' attention due to their potential growth prospects and solid financial performance. In this comparison, we will delve into the key factors driving the stock prices of IBM and Mphasis, analyzing their strengths, weaknesses, and future outlook.

IBM or Mphasis?

When comparing IBM and Mphasis, 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 Mphasis.

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 2.34%, while Mphasis has a dividend yield of 1.92%. 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 95.65%. On the other hand, Mphasis reports a 5-year dividend growth of 20.11% year and a payout ratio of 59.13%.

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 30.73 and Mphasis's P/E ratio at 33.94. 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 8.04 while Mphasis's P/B ratio is 6.24.

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 Mphasis's is 0.74%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with IBM's ROE at 27.14% and Mphasis's ROE at 18.43%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $213.50 for IBM and ₹2819.60 for Mphasis. Over the past year, IBM's prices ranged from $147.35 to $237.37, with a yearly change of 61.09%. Mphasis's prices fluctuated between ₹2144.10 and ₹3187.80, with a yearly change of 48.68%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.