Critical Contrast: Insight Enterprises (NSIT) vs. Infosys (NYSE:INFY)

Infosys (NYSE: INFY) and Insight Enterprises (NASDAQ:NSIT) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, valuation, profitability, earnings and risk.

Profitability

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This table compares Infosys and Insight Enterprises’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Infosys 22.97% 21.31% 17.33%
Insight Enterprises 1.35% 14.73% 4.44%

Risk & Volatility

Infosys has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500. Comparatively, Insight Enterprises has a beta of 1.36, indicating that its share price is 36% more volatile than the S&P 500.

Earnings & Valuation

This table compares Infosys and Insight Enterprises’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Infosys $10.21 billion 3.72 $2.14 billion $0.94 18.61
Insight Enterprises $6.70 billion 0.18 $90.68 million $3.24 10.28

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

Dividends

Infosys pays an annual dividend of $0.39 per share and has a dividend yield of 2.2%. Insight Enterprises does not pay a dividend. Infosys pays out 41.5% of its earnings in the form of a dividend. Infosys has increased its dividend for 5 consecutive years.

Insider and Institutional Ownership

19.7% of Infosys shares are held by institutional investors. Comparatively, 99.0% of Insight Enterprises shares are held by institutional investors. 22.4% of Infosys shares are held by insiders. Comparatively, 1.4% of Insight Enterprises shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Infosys 3 7 4 0 2.07
Insight Enterprises 1 1 1 0 2.00

Infosys currently has a consensus target price of $15.05, suggesting a potential downside of 13.93%. Insight Enterprises has a consensus target price of $49.00, suggesting a potential upside of 47.06%. Given Insight Enterprises’ higher probable upside, analysts clearly believe Insight Enterprises is more favorable than Infosys.

Summary

Infosys beats Insight Enterprises on 12 of the 17 factors compared between the two stocks.

About Infosys

Infosys Limited is engaged in consulting, technology, outsourcing and next-generation services. The Company, along with its subsidiaries, provides business information technology services comprising application development and maintenance, independent validation, infrastructure management, engineering services comprising product engineering and life cycle solutions and business process management; consulting and systems integration services comprising consulting, enterprise solutions, systems integration and advanced technologies; products, business platforms and solutions to accelerate intellectual property-led innovation, including Finacle, its banking solution, and offerings in the areas of Analytics, Cloud and Digital Transformation. Its segments are Financial Services and Insurance (FSI), Manufacturing and Hi-tech (MFG & Hi-TECH), Energy & utilities, Communication and Services (ECS), Retail, Consumer packaged goods and Logistics (RCL), and Life Sciences and Healthcare (LSH).

About Insight Enterprises

Insight Enterprises, Inc. is engaged in providing information technology (IT) hardware, software, and cloud and service solutions to business, government, healthcare and educational clients. The Company operates through three segments: North America, EMEA and APAC. North America comprises the United States and Canada; EMEA comprises Europe, the Middle East and Africa, and APAC comprises Asia Pacific. The Company consults, designs, implements and manages integrated IT solutions for its customers. Its offerings in North America and select countries in Europe, the Middle East and Africa include a suite of IT hardware, software and services solutions. Its offerings in the remainder of EMEA and APAC segments are software and select software-related services. Its cloud management platform serves as a marketplace for its clients to buy and manage their cloud subscriptions with options that manage their software-as-a-service and infrastructure-as-a-service management capabilities.

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