Infosys vs Cognizant Technology Solutions

Infosys and Cognizant Technology Solutions are two leading players in the IT services industry. Both companies have a strong presence in the global market and offer a wide range of services to clients across various sectors. Despite facing tough competition from each other, they have managed to maintain a strong financial performance and solid growth over the years. Investors often compare the stocks of Infosys and Cognizant Technology Solutions to analyze their performance and growth prospects in the market.

Infosys or Cognizant Technology Solutions?

When comparing Infosys and Cognizant Technology Solutions, 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 Cognizant Technology Solutions.

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 2.4%, while Cognizant Technology Solutions has a dividend yield of 1.54%. 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 55.45%. On the other hand, Cognizant Technology Solutions reports a 5-year dividend growth of 7.71% year and a payout ratio of 27.06%.

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 29.73 and Cognizant Technology Solutions's P/E ratio at 17.52. 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 9.57 while Cognizant Technology Solutions's P/B ratio is 2.77.

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 Cognizant Technology Solutions's is 0.38%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Infosys's ROE at 32.17% and Cognizant Technology Solutions's ROE at 16.41%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $22.97 for Infosys and $76.65 for Cognizant Technology Solutions. Over the past year, Infosys's prices ranged from $16.04 to $23.48, with a yearly change of 46.38%. Cognizant Technology Solutions's prices fluctuated between $62.14 and $80.27, with a yearly change of 29.18%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.