Polaris vs Tech Mahindra Which Outperforms?

Polaris Consulting & Services Ltd., a leading global technology solutions provider, and Tech Mahindra Limited, a multinational information technology company, are both prominent players in the IT industry. Polaris has been known for its innovative solutions and strong presence in financial services, while Tech Mahindra is recognized for its diverse portfolio of services catering to various sectors. Both companies have shown steady growth and have attracted investors looking to capitalize on the booming tech industry. This comparison will delve into their financial performance, market trends, and growth prospects to help investors make an informed decision.

Polaris or Tech Mahindra?

When comparing Polaris and Tech Mahindra, 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 Polaris and Tech Mahindra.

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. Polaris has a dividend yield of 4.18%, while Tech Mahindra has a dividend yield of 2.39%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Polaris reports a 5-year dividend growth of 1.61% year and a payout ratio of 72.40%. On the other hand, Tech Mahindra reports a 5-year dividend growth of 25.74% year and a payout ratio of 0.00%.

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 Polaris P/E ratio at 17.42 and Tech Mahindra's P/E ratio at 48.59. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Polaris P/B ratio is 2.64 while Tech Mahindra's P/B ratio is 6.01.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Polaris has seen a 5-year revenue growth of 0.61%, while Tech Mahindra's is 0.50%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Polaris's ROE at 14.87% and Tech Mahindra's ROE at 12.22%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $62.18 for Polaris and ₹1761.00 for Tech Mahindra. Over the past year, Polaris's prices ranged from $62.18 to $100.91, with a yearly change of 62.29%. Tech Mahindra's prices fluctuated between ₹1162.95 and ₹1807.70, with a yearly change of 55.44%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.