Tech Mahindra vs Wipro Which Is a Better Investment?

Tech Mahindra Limited and Wipro Limited are two leading IT companies in India that are listed on the stock exchange. Tech Mahindra focuses on providing IT solutions and services, while Wipro offers a wide range of IT consulting and outsourcing services. Both companies have a strong track record of growth and profitability, making them attractive investment options for investors looking to capitalize on the booming IT sector in India. In this comparison, we will analyze the performance of Tech Mahindra and Wipro stocks to help investors make informed decisions.

Tech Mahindra or Wipro?

When comparing Tech Mahindra and Wipro, 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 Wipro.

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 3.46%, while Wipro has a dividend yield of 0.17%. 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, Wipro reports a 5-year dividend growth of -5.59% year and a payout ratio of 4.44%.

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 45.32 and Wipro's P/E ratio at 25.82. 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 5.61 while Wipro's P/B ratio is 3.70.

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 Wipro's is 0.92%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Tech Mahindra's ROE at 12.22% and Wipro's ROE at 15.25%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ₹1663.65 for Tech Mahindra and $6.78 for Wipro. Over the past year, Tech Mahindra's prices ranged from ₹1143.50 to ₹1761.85, with a yearly change of 54.08%. Wipro's prices fluctuated between $4.63 and $7.04, with a yearly change of 52.05%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.