Comparing Infosys (NYSE:INFY) & Accenture (NYSE:ACN)

Infosys (NYSE:INFY) and Accenture (NYSE:ACN) are both large-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, profitability, risk, dividends, earnings and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and price targets for Infosys and Accenture, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Infosys	1	6	0	0	1.86
Accenture	0	10	17	0	2.63

Infosys presently has a consensus target price of $14.22, suggesting a potential upside of 15.83%. Accenture has a consensus target price of $260.81, suggesting a potential upside of 49.54%. Given Accenture’s stronger consensus rating and higher possible upside, analysts plainly believe Accenture is more favorable than Infosys.

Dividends

Infosys pays an annual dividend of $0.44 per share and has a dividend yield of 3.6%. Accenture pays an annual dividend of $6.52 per share and has a dividend yield of 3.7%. Infosys pays out 55.0% of its earnings in the form of a dividend. Accenture pays out 53.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Accenture has increased its dividend for 20 consecutive years. Accenture is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

16.2% of Infosys shares are owned by institutional investors. Comparatively, 75.1% of Accenture shares are owned by institutional investors. 22.4% of Infosys shares are owned by insiders. Comparatively, 0.0% of Accenture shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Infosys and Accenture’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Infosys	16.44%	32.64%	20.16%
Accenture	10.61%	26.33%	12.94%

Earnings and Valuation

This table compares Infosys and Accenture”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Infosys	$20.16 billion	2.46	$3.32 billion	$0.80	15.34
Accenture	$69.67 billion	1.67	$7.68 billion	$12.21	14.28

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

Volatility and Risk

Infosys has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, Accenture has a beta of 1.09, meaning that its stock price is 9% more volatile than the S&P 500.

Summary

Accenture beats Infosys on 11 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 Accenture

Accenture plc, a professional services company, provides strategy and consulting, industry X, song, and technology and operation services worldwide. The company offers application services, including agile transformation, DevOps, application modernization, enterprise architecture, software and quality engineering, data management; intelligent automation comprising robotic process automation, natural language processing, and virtual agents; and application management services, as well as software engineering services; strategy and consulting services; data and analytics strategy, data discovery and augmentation, data management and beyond, data democratization, and industrialized solutions comprising turnkey analytics and artificial intelligence (AI) solutions; metaverse; and sustainability services. It also provides change management, HR transformation and delivery, organization strategy and design, talent strategy and development, and leadership and culture services; digital commerce; infrastructure services, including cloud infrastructure managed, cloud and data center, network, digital workplace, database platforms, service management, and cloud and infrastructure security services; data-enabled operating models; technology consulting and AI services; and technology consulting services. In addition, the company offers engineering and R&D digitization, smart connected products, product as-a-service enablement, capital projects, intelligent asset management, digital industrial workforce, and autonomous robotic systems; business process outsourcing; and services related to technology innovation. Further, it provides cloud, ecosystem, marketing, security, supply chain management, zero-based transformation, customer experience, finance consulting, mergers and acquisitions, and sustainability services. The company has a collaboration with Salesforce, Inc. to develop Salesforce Life Sciences Cloud. The company was founded in 1951 and is based in Dublin, Ireland.