The geometrical irregularities provided with elements, which are used in machining. These irregularities disturb the stress distribution. In this study, the stress distribution of rectangular plate having a circular hole is analyzed. The two different materials are used for this analysis and results compared with one another to get an idea about stress distribution and deformation for the designing of the machine. From the present investigation, it can be concluded that the maximum stress occurs at corners of holes in both materials. Also, for both materials, it is observed that, as T/D ratio increases, it also increases stress concentration factor. The stress concentration factor values obtained from finite element analysis shows the maximum error of 0.33% for magnesium alloy and 0.30% for polyethylene, which is very minor. Thus, from the present study, it can be said that finite element analysis is a very effective tool to determine stresses induced in various materials.