Mphasis vs Infosys Which Is a Smarter Choice?

Mphasis and Infosys are two prominent players in the Indian IT services industry, each with its unique strengths and opportunities. Mphasis, a subsidiary of the American multinational corporation DXC Technology, has been steadily growing its market share and expanding its portfolio of services. Infosys, on the other hand, is one of India's largest IT services companies, known for its innovative solutions and strong global presence. Both stocks have shown resilience in a volatile market, making them attractive options for investors seeking exposure to the technology sector.

Mphasis or Infosys?

When comparing Mphasis and Infosys, 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 Infosys.

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 1.92%, while Infosys has a dividend yield of 2.66%. 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, Infosys reports a 5-year dividend growth of -5.23% year and a payout ratio of 70.73%.

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 33.94 and Infosys's P/E ratio at 28.25. 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 6.24 while Infosys's P/B ratio is 8.46.

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 Infosys's is 0.65%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Mphasis's ROE at 18.43% and Infosys's ROE at 31.58%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ₹2819.60 for Mphasis and $21.77 for Infosys. Over the past year, Mphasis's prices ranged from ₹2144.10 to ₹3187.80, with a yearly change of 48.68%. Infosys's prices fluctuated between $16.04 and $23.48, with a yearly change of 46.38%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.