Tokyo Electron (OTCMKTS:TOELY) and Taiwan Semiconductor Manufacturing (NYSE:TSM) are both large-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, valuation, dividends, earnings, risk, analyst recommendations and institutional ownership.
Insider and Institutional Ownership
1.0% of Tokyo Electron shares are owned by institutional investors. Comparatively, 18.3% of Taiwan Semiconductor Manufacturing shares are owned by institutional investors. 1.1% of Taiwan Semiconductor Manufacturing shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Valuation and Earnings
This table compares Tokyo Electron and Taiwan Semiconductor Manufacturing’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Tokyo Electron||$10.37 billion||6.50||$1.70 billion||$2.69||39.85|
|Taiwan Semiconductor Manufacturing||$34.63 billion||19.33||$11.83 billion||$3.39||38.08|
Taiwan Semiconductor Manufacturing has higher revenue and earnings than Tokyo Electron. Taiwan Semiconductor Manufacturing is trading at a lower price-to-earnings ratio than Tokyo Electron, indicating that it is currently the more affordable of the two stocks.
Tokyo Electron pays an annual dividend of $1.36 per share and has a dividend yield of 1.3%. Taiwan Semiconductor Manufacturing pays an annual dividend of $1.41 per share and has a dividend yield of 1.1%. Tokyo Electron pays out 50.6% of its earnings in the form of a dividend. Taiwan Semiconductor Manufacturing pays out 41.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Taiwan Semiconductor Manufacturing has raised its dividend for 1 consecutive years.
Risk and Volatility
Tokyo Electron has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500. Comparatively, Taiwan Semiconductor Manufacturing has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500.
This is a summary of recent ratings and recommmendations for Tokyo Electron and Taiwan Semiconductor Manufacturing, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Taiwan Semiconductor Manufacturing||2||0||6||0||2.50|
Taiwan Semiconductor Manufacturing has a consensus target price of $99.00, suggesting a potential downside of 23.32%. Given Taiwan Semiconductor Manufacturing’s higher probable upside, analysts clearly believe Taiwan Semiconductor Manufacturing is more favorable than Tokyo Electron.
This table compares Tokyo Electron and Taiwan Semiconductor Manufacturing’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Taiwan Semiconductor Manufacturing||37.94%||28.73%||20.16%|
Taiwan Semiconductor Manufacturing beats Tokyo Electron on 13 of the 16 factors compared between the two stocks.
Tokyo Electron Company Profile
Tokyo Electron Limited, together with its subsidiaries, develops, manufactures, distributes, and sells semiconductor and flat panel display (FPD) production equipment in Japan, North America, Europe, South Korea, Taiwan, China, and internationally. The company's Semiconductor Production Equipment segment offers coaters/developers, plasma etch systems, and single wafer deposition systems and cleaning systems used in wafer processing; wafer probers used in wafer testing process; and wafer bonders/debonders used in packaging processes. Its Flat Panel Display Production Equipment segment provides coaters/developers and plasma etch/ash systems for use in the manufacture of FPDs, as well as inkjet printing systems for manufacturing OLED panels. The company also offers logistic, facility maintenance, and insurance services. Tokyo Electron Limited was incorporated in 1951 and is headquartered in Tokyo, Japan.
Taiwan Semiconductor Manufacturing Company Profile
Taiwan Semiconductor Manufacturing Company Limited manufactures and sells integrated circuits and semiconductors. It also offers customer service, account management, and engineering services. The company serves customers in computer, communications, consumer, and industrial and standard segments in North America, Europe, Japan, China, and South Korea. Taiwan Semiconductor Manufacturing Company Limited was founded in 1987 and is headquartered in HsinChu, Taiwan.
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