Emerging Money recently advised that Infosys Ltd (
INFY
,
quote
) was likely to
recover from disappointing earnings
. It has, with a 10.16% rise for the last month of market
action.
[caption id="attachment_66526" align="alignright" width="300"
caption="Infosys campus in Bangalore"]
[/caption]
Infosys, based in India,
"...defines, designs, and delivers information technology
enabled business solutions. The company, together with its
subsidiaries, provides various services, including business
consulting, package enabled consulting and implementation, custom
application development, maintenance and production support,
technology consulting, business process management and solutions,
product engineering solutions, infrastructure maintenance services,
validation solutions, and systems integration services. It also
develops, markets, and licenses banking products and solutions,
such as Finacle suite, a Web-enabled solution that addresses banks
core banking, treasury, wealth management, consumer and corporate
e-banking, mobile banking, Islamic banking, and Web-based cash
management requirements. In addition, the company provides business
process management services, such as offsite customer relationship
management, finance and accounting, and administration and sales
order processing."
Not only has Infosys rebounded,
it is on the prowl for acquisitions
, which is a sign of strength. Infosys has a very strong balance
sheet to finance any takeovers. A 24.71% profit margin has resulted
in plenty of cash to buy other companies.
Earnings-per-share growth is on a very positive trend, with the
yearly growth rate higher than the quarterly growth rate. The rate
projected for the next five years is higher than both which is very
positive for shareholders.
Also positive for shareholders is a return-on-equity of 28.50%.
A return-on-equity of 15% is considered to be average. The profit
margin and return-on-equity for Infosys compare favorable with
those of Apple (
AAPL
,
quote
). Like Apple, Infosys also provides dividend income to its
shareholders. The low dividend payout ratio allows for ample cash
flow to increase the yield or initiate stock repurchase programs to
reward shareholders.
Now trading around $45.66, the mean analyst target price for
Infosys over the next year is $46.04. The 52-week high is
$60.59.
