Infosys vs CGI Which Is a Smarter Choice?

Infosys and CGI are two leading companies in the IT services industry, both with a strong global presence and a reputation for delivering innovative solutions to their clients. Investors looking to add tech stocks to their portfolio may consider both Infosys and CGI for their potential growth and profitability. Infosys, based in India, has a solid track record of success, while CGI, headquartered in Canada, has also shown impressive growth in recent years. Both companies offer investors opportunities to benefit from the booming tech sector.

Infosys or CGI?

When comparing Infosys and CGI, 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 Infosys and CGI.

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. Infosys has a dividend yield of 2.66%, while CGI has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Infosys reports a 5-year dividend growth of -5.23% year and a payout ratio of 70.73%. On the other hand, CGI reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%.

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 Infosys P/E ratio at 28.25 and CGI's P/E ratio at 21.17. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Infosys P/B ratio is 8.46 while CGI's P/B ratio is 3.98.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Infosys has seen a 5-year revenue growth of 0.65%, while CGI's is 0.51%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Infosys's ROE at 31.58% and CGI's ROE at 19.29%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $21.77 for Infosys and $110.87 for CGI. Over the past year, Infosys's prices ranged from $16.04 to $23.48, with a yearly change of 46.38%. CGI's prices fluctuated between $96.92 and $118.89, with a yearly change of 22.67%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.