Contrasting Taiwan Semiconductor Manufacturing (NYSE:TSM) & T1 Energy (NYSE:TE)

Taiwan Semiconductor Manufacturing (NYSE:TSM) and T1 Energy (NYSE:TE) are both technology companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, institutional ownership, risk, earnings, profitability, valuation and analyst recommendations.

Volatility & Risk

Taiwan Semiconductor Manufacturing has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500. Comparatively, T1 Energy has a beta of 2.36, suggesting that its stock price is 136% more volatile than the S&P 500.

Dividends

Taiwan Semiconductor Manufacturing pays an annual dividend of $3.46 per share and has a dividend yield of 0.9%. T1 Energy pays an annual dividend of $0.92 per share and has a dividend yield of 34.2%. Taiwan Semiconductor Manufacturing pays out 22.3% of its earnings in the form of a dividend. T1 Energy pays out -46.5% 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. T1 Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Taiwan Semiconductor Manufacturing and T1 Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Taiwan Semiconductor Manufacturing	51.51%	42.84%	29.37%
T1 Energy	-38.49%	-149.67%	-20.46%

Earnings and Valuation

This table compares Taiwan Semiconductor Manufacturing and T1 Energy”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Taiwan Semiconductor Manufacturing	$122.42 billion	17.16	$54.12 billion	$15.54	26.06
T1 Energy	$996.85 million	0.79	-$367.83 million	($1.98)	-1.36

Taiwan Semiconductor Manufacturing has higher revenue and earnings than T1 Energy. T1 Energy is trading at a lower price-to-earnings ratio than Taiwan Semiconductor Manufacturing, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

16.5% of Taiwan Semiconductor Manufacturing shares are owned by institutional investors. Comparatively, 52.3% of T1 Energy shares are owned by institutional investors. 1.1% of Taiwan Semiconductor Manufacturing shares are owned by company insiders. Comparatively, 22.4% of T1 Energy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Taiwan Semiconductor Manufacturing and T1 Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Taiwan Semiconductor Manufacturing	0	1	12	3	3.12
T1 Energy	1	4	5	1	2.55

Taiwan Semiconductor Manufacturing currently has a consensus price target of $528.78, indicating a potential upside of 30.55%. T1 Energy has a consensus price target of $7.50, indicating a potential upside of 178.81%. Given T1 Energy’s higher possible upside, analysts clearly believe T1 Energy is more favorable than Taiwan Semiconductor Manufacturing.

Summary

Taiwan Semiconductor Manufacturing beats T1 Energy on 11 of the 17 factors compared between the two stocks.

About Taiwan Semiconductor Manufacturing

Taiwan Semiconductor Manufacturing Company Limited, together with its subsidiaries, manufactures, packages, tests, and sells integrated circuits and other semiconductor devices in Taiwan, China, Europe, the Middle East, Africa, Japan, the United States, and internationally. It provides a range of wafer fabrication processes, including processes to manufacture complementary metal- oxide-semiconductor (CMOS) logic, mixed-signal, radio frequency, embedded memory, bipolar CMOS mixed-signal, and others. The company also offers customer and engineering support services; manufactures masks; and invests in technology start-up companies; researches, designs, develops, manufactures, packages, tests, and sells color filters; and provides investment services. Its products are used in high performance computing, smartphones, Internet of things, automotive, and digital consumer electronics. The company was incorporated in 1987 and is headquartered in Hsinchu City, Taiwan.

About T1 Energy

T1 Energy Inc. is an energy solutions provider building an integrated supply chain for solar and batteries. T1 Energy Inc. , formerly known as FREYR Battery, is based in NEW YORK.