Infosys vs SAP Which Should You Buy?

Infosys and SAP are two leading companies in the global technology industry, specializing in software development and enterprise solutions. Both companies have a strong presence in the stock market, with Infosys listed on the Indian stock exchange and SAP on the German stock exchange. Investors often compare and contrast the performance of Infosys vs SAP stocks to make informed decisions. While Infosys has shown consistent growth and profitability, SAP is known for its innovative products and services, creating an interesting dynamic in the market.

Infosys or SAP?

When comparing Infosys and SAP, 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 SAP.

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 SAP has a dividend yield of 1.03%. 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, SAP reports a 5-year dividend growth of 6.69% year and a payout ratio of 90.44%.

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 SAP's P/E ratio at 90.97. 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 SAP's P/B ratio is 6.26.

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 SAP's is 0.29%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Infosys's ROE at 31.58% and SAP's ROE at 6.71%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $21.77 for Infosys and $234.62 for SAP. Over the past year, Infosys's prices ranged from $16.04 to $23.48, with a yearly change of 46.38%. SAP's prices fluctuated between $143.72 and $243.01, with a yearly change of 69.09%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.