Tata Consultancy Services (TCS) vs Infosys: Which is better dividend stock? Yield, history, returns compared

Counted amongst the top 10 largest companies by market, information technology companies Tata Consultancy Services (TCS) and Infosys are both well-known companies, loved by shareholders for paying good dividends.

Constituents of BSE Sensex, Tata Group’s TCS and NR Narayana Murthy-led Infosys are the second and seventh biggest listed companies by market cap, respectively. While TCS, which is India’s largest IT company, has an m-cap of Rs 12,45,418.09 crore, Infosys is worth Rs 6,26,083.70 crore on BSE.

Both TCS and Infosys are the biggest IT companies in India with operations spanning worldwide.

TCS stands out with a higher current dividend yield, typically ranging from 3.39% to 3.89% for FY25, much above Infosys, whose yield is in the 1.37% to 2.73% range. The annual dividend payout per share is also significantly greater for TCS (~₹154) compared to Infosys (~₹71). This means TCS shareholders receive a larger passive income per share for the year. On dividend sustainability, TCS’s lower payout ratio and superior cash flow coverage make its dividends less vulnerable to earnings fluctuations. Infosys also maintains robust dividend coverage, but with a higher payout ratio, future dividend growth could be more reliant on sustained profit expansion.

In summary, while Infosys shows commendable consistency and a higher recent rate of dividend growth, TCS is generally the stronger dividend stock, offering greater yields, larger annual payouts, and higher overall shareholder returns—a profile that appeals especially to investors prioritizing regular income and long-term stability.