Infosys (NYSE:INFY – Get Free Report) is one of 273 publicly-traded companies in the “IT Services” industry, but how does it compare to its peers? We will compare Infosys to related companies based on the strength of its risk, profitability, analyst recommendations, dividends, valuation, earnings and institutional ownership.
Volatility & Risk
Infosys has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, Infosys’ peers have a beta of 2.10, suggesting that their average share price is 110% more volatile than the S&P 500.
Profitability
This table compares Infosys and its peers’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Infosys | 16.21% | 35.52% | 20.98% |
| Infosys Competitors | -188.96% | -36.18% | -8.49% |
Insider and Institutional Ownership
16.2% of Infosys shares are owned by institutional investors. Comparatively, 36.7% of shares of all “IT Services” companies are owned by institutional investors. 22.4% of Infosys shares are owned by company insiders. Comparatively, 20.5% of shares of all “IT Services” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Dividends
Infosys pays an annual dividend of $0.47 per share and has a dividend yield of 3.9%. Infosys pays out 58.0% of its earnings in the form of a dividend. As a group, “IT Services” companies pay a dividend yield of 2.2% and pay out 71.3% of their earnings in the form of a dividend. Infosys is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.
Earnings and Valuation
This table compares Infosys and its peers revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Net Income | Price/Earnings Ratio | |
| Infosys | $20.37 billion | $3.31 billion | 14.92 |
| Infosys Competitors | $9.08 billion | $226.41 million | -36.60 |
Infosys has higher revenue and earnings than its peers. Infosys is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.
Analyst Ratings
This is a breakdown of current ratings and target prices for Infosys and its peers, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Infosys | 1 | 10 | 0 | 0 | 1.91 |
| Infosys Competitors | 1979 | 5634 | 9404 | 345 | 2.47 |
Infosys currently has a consensus price target of $11.79, suggesting a potential downside of 2.47%. As a group, “IT Services” companies have a potential upside of 17.15%. Given Infosys’ peers stronger consensus rating and higher possible upside, analysts plainly believe Infosys has less favorable growth aspects than its peers.
Summary
Infosys beats its peers on 9 of the 15 factors compared.
About Infosys
Infosys Ltd. is a digital services and consulting company, which engages in the provision of end-to-end business solutions. It operates through the following segments: Financial Services, Retail, Communication, Energy, Utilities, Resources, and Services, Manufacturing, Hi-Tech, Life Sciences, and All Other. The company was founded by Dinesh Krishnan Swamy, Senapathy Gopalakrishnan, Narayana Ramarao Nagavara Murthy, Raghavan N. S., Ashok Arora, Nandan M. Nilekani, and S. D. Shibulal on July 2, 1981 and is headquartered in Bangalore, India.
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