Cognizant Technology Solutions recorded a 3.92% price increase over the last quarter, a movement likely influenced by its recent partnership with TestHuset announced on March 5, aimed at advancing software testing services in Denmark. The company also declared an increased quarterly dividend of $0.31 per share and executed a substantial share repurchase program amounting to $140 million. Additionally, its earnings update on February 5 reported higher year-over-year sales for both the quarter and entire fiscal year, although net income saw a slight decline for the quarter. Against a backdrop of wavering market conditions, with the major indexes experiencing mixed results and a recent 3.1% overall market drop, Cognizant's strategic expansions, alongside steady financial performance, appear to have positively contributed to its share price move in an otherwise volatile economic climate.

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Over the past five years, Cognizant Technology Solutions has delivered a total return of 61.83% for its shareholders, incorporating both share price appreciation and dividends. This performance reflects a period marked by strategic adjustments and solid growth initiatives. Notably, the company reported an average earnings growth of 7.4% annually, which bolstered investor confidence despite a recent decline in its annual growth rate. This sustained growth, combined with its ability to leverage partnerships, such as the integration with Elektrobit and collaboration with Etex for GenAI solutions, has underpinned its long-term success.

While the US IT industry posted negative annual earnings growth recently, Cognizant's outperforming 5.4% earnings growth highlights its resilience in a challenging sector. Additionally, the company capitalized on market-driven valuation opportunities, trading well below its estimated fair value and presenting itself as good value compared to peers. These factors, along with a commitment to shareholder returns through dividends and share buybacks, have contributed to its strong five-year performance record.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include NasdaqGS:CTSH.

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