Infosys vs CTS Which Outperforms?

Infosys and Cognizant Technology Solutions (CTS) are two major players in the information technology services industry. Infosys, based in India, is a global leader in consulting, technology, and outsourcing solutions. CTS, headquartered in the United States, also offers a range of IT services to clients worldwide. Both companies have been strong performers in the stock market, with Infosys enjoying a larger market capitalization but CTS showing consistent growth in recent years. Investors looking to invest in IT stocks may consider these two companies for their potential for long-term growth and profitability.

Infosys or CTS?

When comparing Infosys and CTS, 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 CTS.

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 2.92%, while CTS has a dividend yield of 0.37%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Infosys reports a 5-year dividend growth of 12.90% year and a payout ratio of 69.20%. On the other hand, CTS reports a 5-year dividend growth of 0.00% year and a payout ratio of 8.41%.

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 25.70 and CTS's P/E ratio at 22.45. 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 8.24 while CTS's P/B ratio is 1.28.

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 CTS's is 0.18%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Infosys's ROE at 31.74% and CTS's ROE at 8.97%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $19.92 for Infosys and $42.29 for CTS. Over the past year, Infosys's prices ranged from $16.04 to $23.63, with a yearly change of 47.32%. CTS's prices fluctuated between $41.90 and $59.68, with a yearly change of 42.43%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.