Tower Semiconductor (NASDAQ:TSEM) & Taiwan Semiconductor Mfg. (NASDAQ:TSM) Financial Comparison

Tower Semiconductor (NASDAQ:TSEM) and Taiwan Semiconductor Mfg. (NYSE:TSM) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, dividends, valuation and analyst recommendations.

Insider & Institutional Ownership

52.4% of Tower Semiconductor shares are owned by institutional investors. Comparatively, 19.2% of Taiwan Semiconductor Mfg. shares are owned by institutional investors. 1.0% of Tower Semiconductor shares are owned by insiders. Comparatively, 1.1% of Taiwan Semiconductor Mfg. shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Tower Semiconductor and Taiwan Semiconductor Mfg., as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tower Semiconductor 0 1 2 0 2.67
Taiwan Semiconductor Mfg. 0 0 4 0 3.00

Tower Semiconductor presently has a consensus price target of $26.57, indicating a potential upside of 10.25%. Taiwan Semiconductor Mfg. has a consensus price target of $55.00, indicating a potential downside of 5.48%. Given Tower Semiconductor’s higher possible upside, equities analysts clearly believe Tower Semiconductor is more favorable than Taiwan Semiconductor Mfg..

Earnings and Valuation

This table compares Tower Semiconductor and Taiwan Semiconductor Mfg.’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tower Semiconductor $1.30 billion 1.82 $135.58 million $1.51 15.96
Taiwan Semiconductor Mfg. $34.63 billion 8.71 $11.18 billion $2.15 27.07

Taiwan Semiconductor Mfg. has higher revenue and earnings than Tower Semiconductor. Tower Semiconductor is trading at a lower price-to-earnings ratio than Taiwan Semiconductor Mfg., indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Tower Semiconductor and Taiwan Semiconductor Mfg.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tower Semiconductor 8.51% 9.63% 6.65%
Taiwan Semiconductor Mfg. 32.28% 21.27% 15.84%

Volatility and Risk

Tower Semiconductor has a beta of 1.32, indicating that its share price is 32% more volatile than the S&P 500. Comparatively, Taiwan Semiconductor Mfg. has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500.

Summary

Taiwan Semiconductor Mfg. beats Tower Semiconductor on 11 of the 14 factors compared between the two stocks.

About Tower Semiconductor

Tower Semiconductor Ltd., an independent semiconductor foundry, manufactures and markets analog intensive mixed-signal semiconductor devices in the United States, Japan, Asia, and Europe. It provides various customizable process technologies, including SiGe, BiCMOS, mixed-signal/CMOS, RF CMOS, CMOS image sensor, integrated power management, and MEMS. The company also offers transfer optimization and development process services to integrated device manufacturers and fabless companies. It serves various markets, such as automotive, medical and dental, professional photography, industrial and machine vision, AR and 3D gesture control, security, space and scientific, projectors and display, consumer, aerospace and defense, computers and servers, as well as Internet of Things; timing controllers; digital, mixed-signal/CMOS & RFCMOS; and display driver IC. The company was founded in 1993 and is headquartered in Migdal Haemek, Israel.

About Taiwan Semiconductor Mfg.

Taiwan Semiconductor Manufacturing Company Limited, together with its subsidiaries, engages in manufacturing, selling, packaging, testing, and computer-aided design of integrated circuits and other semiconductor devices. The company manufactures masks and electronic spare parts; researches, develops, designs, manufactures, sells, packages, and tests color filters; and offers customer and engineering support services. It is also involved in investing activities. The company operates in North America, China, Japan, Asia Pacific, Europe, the Middle East, and Africa. Taiwan Semiconductor Manufacturing Company Limited was founded in 1987 and is headquartered in HsinChu, Taiwan.

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