Head-To-Head Contrast: Infosys (NYSE:INFY) & Information Services Group (NASDAQ:III)

Infosys (NYSE:INFY) and Information Services Group (NASDAQ:III) are both technology companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, earnings, risk, valuation, institutional ownership and profitability.

Dividends

Infosys pays an annual dividend of $0.45 per share and has a dividend yield of 3.6%. Information Services Group pays an annual dividend of $0.18 per share and has a dividend yield of 3.1%. Infosys pays out 55.6% of its earnings in the form of a dividend. Information Services Group pays out 78.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Information Services Group has raised its dividend for 1 consecutive years. Infosys is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Infosys and Information Services Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Infosys	16.38%	33.91%	20.54%
Information Services Group	4.67%	13.59%	6.20%

Valuation and Earnings

This table compares Infosys and Information Services Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Infosys	$20.16 billion	2.54	$3.31 billion	$0.81	15.61
Information Services Group	$250.25 million	1.13	$9.34 million	$0.23	25.30

Infosys has higher revenue and earnings than Information Services Group. Infosys is trading at a lower price-to-earnings ratio than Information Services Group, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Infosys and Information Services Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Infosys	1	10	0	0	1.91
Information Services Group	0	1	1	0	2.50

Infosys currently has a consensus price target of $11.45, indicating a potential downside of 9.42%. Information Services Group has a consensus price target of $5.50, indicating a potential downside of 5.50%. Given Information Services Group’s stronger consensus rating and higher probable upside, analysts clearly believe Information Services Group is more favorable than Infosys.

Volatility and Risk

Infosys has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500. Comparatively, Information Services Group has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500.

Institutional & Insider Ownership

16.2% of Infosys shares are owned by institutional investors. Comparatively, 73.1% of Information Services Group shares are owned by institutional investors. 22.4% of Infosys shares are owned by company insiders. Comparatively, 15.8% of Information Services Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Infosys beats Information Services Group on 10 of the 17 factors compared between the two stocks.

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.

About Information Services Group

Information Services Group, Inc., together with its subsidiaries, operates as a technology research and advisory company in the Americas, Europe, and the Asia Pacific. The company offers digital transformation services, including automation, cloud, and data analytics; sourcing advisory; managed governance and risk; network carrier; technology strategy and operations design; change management; and market intelligence and technology research and analysis services. It supports private and public sector organizations to transform and optimize their operational environments. The company also provides ISG Digital, a client solution platform that helps clients developing technology, transformation, sourcing, and digital solutions; and ISG Enterprise, a client solution platform that helps clients manage change and optimize operations in areas comprising finance, human resource, and Procure2Pay. In addition, it offers ISG GovernX to automate the management of third-party supplier relationships that comprise contract and project lifecycles, and risk management; ISG Generative AI; ISG Network Select to streamline and simplify how enterprises build their network solutions; HR technology and transformations; providers-as-a-business services; ISG Digital Engineering; ISG Research; and training-as-a-service. The company serves private sector clients operating in the manufacturing, banking and financial services, insurance, health sciences, energy and utilities, and consumer services industries; and public sector clients, including state and local governments, airport and transit authorities, and national and provincial government units. Information Services Group, Inc. was founded in 2006 and is based in Stamford, Connecticut.