Mphasis vs Cognizant Technology Solutions Which Is a Better Investment?

Mphasis and Cognizant Technology Solutions are two leading companies in the IT services industry, with a strong presence in the global market. Both companies offer a range of services, including IT consulting, digital transformation, and business process outsourcing. While Mphasis has shown steady growth and profitability in recent years, Cognizant Technology Solutions has faced some challenges, including leadership changes and sluggish revenue growth. Investors are closely watching both companies to see how they will navigate the ever-changing technology landscape and capitalize on emerging opportunities.

Mphasis or Cognizant Technology Solutions?

When comparing Mphasis 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 Mphasis 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. Mphasis has a dividend yield of 1.72%, while Cognizant Technology Solutions has a dividend yield of 1.49%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Mphasis reports a 5-year dividend growth of 20.11% year and a payout ratio of 59.13%. On the other hand, Cognizant Technology Solutions reports a 5-year dividend growth of 3.01% year and a payout ratio of 26.47%.

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 Mphasis P/E ratio at 37.84 and Cognizant Technology Solutions's P/E ratio at 17.70. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Mphasis P/B ratio is 6.96 while Cognizant Technology Solutions's P/B ratio is 2.76.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Mphasis has seen a 5-year revenue growth of 0.74%, while Cognizant Technology Solutions's is 0.38%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Mphasis's ROE at 18.43% and Cognizant Technology Solutions's ROE at 16.36%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ₹3174.65 for Mphasis and $80.33 for Cognizant Technology Solutions. Over the past year, Mphasis's prices ranged from ₹2187.00 to ₹3237.95, with a yearly change of 48.05%. Cognizant Technology Solutions's prices fluctuated between $63.79 and $82.41, with a yearly change of 29.19%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.