Tech Mahindra vs Mphasis Which Outperforms?

Tech Mahindra and Mphasis are two prominent names in the IT services industry, both operating in the same market space. Tech Mahindra is a global leader in digital transformation, offering services in areas such as cybersecurity, cloud computing, and analytics. Mphasis, on the other hand, specializes in application development, infrastructure management, and business process outsourcing. Investors often compare the two stocks to determine which offers better growth potential and value for their portfolios.

Tech Mahindra or Mphasis?

When comparing Tech Mahindra and Mphasis, 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 Tech Mahindra and Mphasis.

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. Tech Mahindra has a dividend yield of 3.44%, while Mphasis has a dividend yield of 1.94%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Tech Mahindra reports a 5-year dividend growth of 25.74% year and a payout ratio of 0.00%. On the other hand, Mphasis reports a 5-year dividend growth of 20.11% year and a payout ratio of 59.13%.

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 Tech Mahindra P/E ratio at 45.65 and Mphasis's P/E ratio at 33.68. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Tech Mahindra P/B ratio is 5.65 while Mphasis's P/B ratio is 6.20.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Tech Mahindra has seen a 5-year revenue growth of 0.50%, while Mphasis's is 0.74%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Tech Mahindra's ROE at 12.22% and Mphasis's ROE at 18.43%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ₹1663.00 for Tech Mahindra and ₹2828.95 for Mphasis. Over the past year, Tech Mahindra's prices ranged from ₹1162.95 to ₹1761.85, with a yearly change of 51.50%. Mphasis's prices fluctuated between ₹2187.00 and ₹3187.80, with a yearly change of 45.76%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.