Garmin (NASDAQ:GRMN) and Infosys (NYSE:INFY) are both large-cap computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.
Volatility & Risk
Garmin has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500. Comparatively, Infosys has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of current ratings and price targets for Garmin and Infosys, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Garmin | 0 | 5 | 5 | 0 | 2.50 |
Infosys | 1 | 4 | 4 | 1 | 2.50 |
Garmin presently has a consensus price target of $126.4286, suggesting a potential upside of 1.39%. Infosys has a consensus price target of $12.6250, suggesting a potential downside of 26.64%. Given Garmin's higher probable upside, analysts plainly believe Garmin is more favorable than Infosys.
Dividends
Garmin pays an annual dividend of $2.44 per share and has a dividend yield of 2.0%. Infosys pays an annual dividend of $0.27 per share and has a dividend yield of 1.6%. Garmin pays out 54.8% of its earnings in the form of a dividend. Infosys pays out 49.1% 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. Garmin has increased its dividend for 3 consecutive years. Garmin is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares Garmin and Infosys' top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Garmin | $3.76 billion | 6.32 | $952.49 million | $4.45 | 27.85 |
Infosys | $12.78 billion | 5.70 | $2.33 billion | $0.55 | 31.20 |
Infosys has higher revenue and earnings than Garmin. Garmin is trading at a lower price-to-earnings ratio than Infosys, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
49.6% of Garmin shares are owned by institutional investors. Comparatively, 16.3% of Infosys shares are owned by institutional investors. 22.0% of Garmin shares are owned by company insiders. Comparatively, 22.4% of Infosys shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Profitability
This table compares Garmin and Infosys' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Garmin | 25.89% | 18.38% | 14.39% |
Infosys | 19.06% | 27.65% | 19.45% |
Summary
Garmin beats Infosys on 9 of the 17 factors compared between the two stocks.