Tech Mahindra vs Polaris Which Outperforms?

Tech Mahindra and Polaris Consulting Services Limited are both well-known players in the IT services industry. Tech Mahindra, owned by the Mahindra Group, offers a wide range of technology solutions and services to clients globally. Polaris, on the other hand, specializes in providing software and consulting services to the banking and financial services sector. Both companies have shown steady growth in recent years, but with Tech Mahindra being a larger, more diversified company, it may be perceived as a safer investment option for some investors.

Tech Mahindra or Polaris?

When comparing Tech Mahindra and Polaris, 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 Polaris.

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 3.4%, while Polaris has a dividend yield of 4.79%. 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, Polaris reports a 5-year dividend growth of 1.61% year and a payout ratio of 72.40%.

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 46.10 and Polaris's P/E ratio at 18.94. 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 5.71 while Polaris's P/B ratio is 2.88.

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 Polaris's is 0.61%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Tech Mahindra's ROE at 12.22% and Polaris's ROE at 14.87%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ₹1666.05 for Tech Mahindra and $68.54 for Polaris. Over the past year, Tech Mahindra's prices ranged from ₹1128.00 to ₹1761.85, with a yearly change of 56.19%. Polaris's prices fluctuated between $68.45 and $100.91, with a yearly change of 47.42%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.