VeriSign (NASDAQ:VRSN) and Infosys (NYSE:INFY) Head-To-Head Review

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
VeriSign	49.06%	-38.40%	59.95%
Infosys	16.21%	34.81%	20.72%

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
VeriSign	$1.73 billion	16.47	$825.70 million	$9.30	34.20
Infosys	$20.16 billion	2.46	$3.31 billion	$0.81	15.10

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

Dividends

VeriSign pays an annual dividend of $3.24 per share and has a dividend yield of 1.0%. Infosys pays an annual dividend of $0.47 per share and has a dividend yield of 3.8%. VeriSign pays out 34.8% of its earnings in the form of a dividend. Infosys pays out 58.0% 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.

Risk and Volatility

VeriSign has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500. Comparatively, Infosys has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500.

Insider and Institutional Ownership

92.9% of VeriSign shares are held by institutional investors. Comparatively, 16.2% of Infosys shares are held by institutional investors. 0.6% of VeriSign shares are held by insiders. Comparatively, 22.4% of Infosys shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for VeriSign and Infosys, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
VeriSign	0	2	4	0	2.67
Infosys	1	10	0	0	1.91

VeriSign presently has a consensus target price of $352.00, suggesting a potential upside of 10.68%. Infosys has a consensus target price of $11.79, suggesting a potential downside of 3.60%. Given VeriSign’s stronger consensus rating and higher probable upside, equities research analysts plainly believe VeriSign is more favorable than Infosys.

Summary

VeriSign beats Infosys on 10 of the 16 factors compared between the two stocks.

About VeriSign

VeriSign, Inc., together with its subsidiaries, provides domain name registry services and internet infrastructure that enables internet navigation for various recognized domain names worldwide. The company enables the security, stability, and resiliency of internet infrastructure and services, including providing root zone maintainer services, operating two of thirteen internet root servers; and offering registration services and authoritative resolution for the .com and .net domains, which supports global e-commerce. It operates directory for .name and .cc; and back-end systems for .edu, domain names. VeriSign, Inc. was incorporated in 1995 and is headquartered in Reston, Virginia.

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.