Daily Stock Analysis: Infosys (INFY)

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Infosys Ltd has the ticker symbol INFY and is a large-cap member of the technology sector as an information technology services firm. This is my first report on Infosys Ltd for this Vista folio but not for some of my previous DOTW portfolios.

Infosys is a leading global IT services provider, with nearly 250,000 employees. 

Based in Bangalore, the Indian IT services firm leverages its offshore outsourcing model to derive 60% of its revenue from North America. 

The company offers traditional IT services offerings: consulting, managed services and cloud infrastructure services, and business process outsourcing as a service (BPaaS).

Three key data points gauge dividend equities or funds like Infosys Ltd:

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money. 

INFY Price

Infosys's price per share closed at $18.65 yesterday. One year ago its price was $8.93. Thus, the price per share has grown about 109% as it recovered from last year's Covid market slump. 

Should Infosys Ltd stock trade in the range of $9 to $27.00 this next year, its recent $18.65 price might rise by $1.35 to reach $20.00 by May 21, 2022. My estimate is $0.17 lower of the median of twelve price estimates from analysts tracking INFY. 

INFY Dividends

Infosys's most recent semi-annual dividend of $0.2005 was declared on April 21st and equates to $0.40 annually which will yield 2.15% based on yesterday's $18.65 closing price. Infosys Ltd has paid variable semi-annual dividends (generally increasing) since April 2000 (21 years.)

INFY Returns

Adding the $0.40 annual Infosys Ltd forward-looking dividend to my $1.35 price upside estimate shows a $1.75 potential gross gain, per share, to be reduced by any costs to trade the shares.  

If we put a little over $1,000.00 today in INFY at $18.65 per share, we'd buy 54 shares.

A $10 broker fee (if charged) would be paid half at purchase and half at a sale and might cost us about $0.19 per share.

Subtract that maybe $0.19 brokerage cost from my estimated $1.75 gross gain per share results in a net gain of $1.56 X 54 shares = $84.24 for an 8.4% net gain on a $1,007.10 investment.

So it is that Infosys Ltd shows a possible 8.4% net gain including a 2.15% forward estimated dividend yield. 

Over the next year at this time, a $1000 investment in INFY could generate $21.50 in cash dividends. And a single share bought at yesterday's closing price was $18.63! So, if INFY is your kind of information technology services investment, Infosys Ltd's share price is about $3.00 below the expected annual dividend income from $1,000 invested. This suggests now is a prime time to add Infosys Ltd to your holdings. 

All of the estimates above are speculation based on the past history of Infosys Ltd. Only time and money invested in this stock will determine its worth.

Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, ...

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