Taiwan Semiconductor Manufacturing (NYSE:TSM) Sets New 12-Month High - Still a Buy?

Key Points

• TSMC shares reached a new 52-week high, trading as high as $481.50, supported by strong profitability, including a 50.31% net margin and 39.25% return on equity.
• Analysts remain broadly bullish, with an average rating of “Buy” and an average price target of $523.22; recent targets range from $440 to $515.
• The company’s quarterly dividend was reduced to $1.0854 from $1.1136, producing an annualized yield of approximately 0.9%, while institutional investors and company insiders have increased their holdings.

Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM - Get Free Report)'s share price reached a new 52-week high on Monday. The stock traded as high as $481.50 and last traded at $477.7140, with a volume of 1374479 shares trading hands. The stock had previously closed at $472.78.

Analysts Set New Price Targets

A number of brokerages have issued reports on TSM. TD Cowen lifted their target price on shares of Taiwan Semiconductor Manufacturing from $400.00 to $440.00 and gave the company a "hold" rating in a research note on Friday, July 17th. Stifel Nicolaus assumed coverage on Taiwan Semiconductor Manufacturing in a report on Tuesday, September 1st. They set a "buy" rating and a $515.00 price objective for the company. Wall Street Zen downgraded Taiwan Semiconductor Manufacturing from a "strong-buy" rating to a "buy" rating in a research note on Saturday, August 8th. DA Davidson boosted their price target on Taiwan Semiconductor Manufacturing from $450.00 to $500.00 and gave the company a "buy" rating in a research note on Friday, July 17th. Finally, Citigroup restated a "buy" rating on shares of Taiwan Semiconductor Manufacturing in a report on Monday, July 6th. Three investment analysts have rated the stock with a Strong Buy rating, thirteen have given a Buy rating and one has given a Hold rating to the stock. According to data from MarketBeat.com, Taiwan Semiconductor Manufacturing presently has an average rating of "Buy" and an average price target of $523.22.

Taiwan Semiconductor Manufacturing Stock Performance

The company has a market cap of $2.50 trillion, a P/E ratio of 34.65, a price-to-earnings-growth ratio of 1.05 and a beta of 1.37. The company has a quick ratio of 2.25, a current ratio of 2.46 and a debt-to-equity ratio of 0.14. The stock's 50-day moving average price is $425.59 and its 200 day moving average price is $409.69.

Taiwan Semiconductor Manufacturing (NYSE:TSM - Get Free Report) last announced its earnings results on Tuesday, June 30th. The semiconductor company reported $4.28 EPS for the quarter. The firm had revenue of $39.89 billion for the quarter. Taiwan Semiconductor Manufacturing had a net margin of 50.31% and a return on equity of 39.25%. As a group, research analysts expect that Taiwan Semiconductor Manufacturing Company Ltd. will post 16.56 EPS for the current fiscal year.

Taiwan Semiconductor Manufacturing Cuts Dividend

The firm also recently announced a quarterly dividend, which will be paid on Thursday, January 7th. Shareholders of record on Thursday, December 10th will be issued a $1.0854 dividend. This is a decrease from Taiwan Semiconductor Manufacturing's previous quarterly dividend of $1.1136. The ex-dividend date of this dividend is Thursday, December 10th. This represents a $4.34 dividend on an annualized basis and a yield of 0.9%. Taiwan Semiconductor Manufacturing's payout ratio is 25.25%.

Insider Activity

In related news, VP Lipen Yuan bought 350 shares of the company's stock in a transaction that occurred on Tuesday, August 18th. The shares were acquired at an average price of $73.58 per share, with a total value of $25,753.00. Following the completion of the transaction, the vice president owned 2,000 shares of the company's stock, valued at $147,160. The trade was a 21.21% increase in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. Also, VP Bor-Zen Tien bought 1,000 shares of the business's stock in a transaction that occurred on Monday, August 3rd. The shares were bought at an average price of $73.06 per share, with a total value of $73,060.00. Following the completion of the purchase, the vice president owned 14,051 shares in the company, valued at approximately $1,026,566.06. The trade was a 7.66% increase in their ownership of the stock. The SEC filing for this purchase provides additional information. Over the last three months, insiders acquired 16,106 shares of company stock valued at $1,186,463. 1.11% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Large investors have recently made changes to their positions in the stock. Tiger Global Management LLC lifted its position in Taiwan Semiconductor Manufacturing by 49.4% in the first quarter. Tiger Global Management LLC now owns 5,565,074 shares of the semiconductor company's stock worth $1,880,717,000 after purchasing an additional 1,839,600 shares during the period. T. Rowe Price Investment Management Inc. increased its holdings in Taiwan Semiconductor Manufacturing by 168.6% in the 4th quarter. T. Rowe Price Investment Management Inc. now owns 2,093,115 shares of the semiconductor company's stock valued at $636,077,000 after buying an additional 1,313,917 shares during the period. Capital Research Global Investors increased its holdings in Taiwan Semiconductor Manufacturing by 66.3% in the 4th quarter. Capital Research Global Investors now owns 3,215,353 shares of the semiconductor company's stock valued at $976,821,000 after buying an additional 1,281,648 shares during the period. Corient Private Wealth LLC raised its stake in shares of Taiwan Semiconductor Manufacturing by 330.0% in the 4th quarter. Corient Private Wealth LLC now owns 1,583,175 shares of the semiconductor company's stock valued at $481,111,000 after buying an additional 1,215,035 shares in the last quarter. Finally, Fundsmith LLP acquired a new position in shares of Taiwan Semiconductor Manufacturing in the 2nd quarter valued at $548,465,000. Institutional investors and hedge funds own 16.51% of the company's stock.

About Taiwan Semiconductor Manufacturing

Taiwan Semiconductor Manufacturing Company Limited NYSE: TSM, commonly known as TSMC, is a Taiwan-based semiconductor manufacturer and the world's largest dedicated semiconductor foundry. Founded in 1987 by Morris Chang, the company pioneered the pure-play foundry model, producing chips designed by other companies rather than selling products under its own semiconductor brand.

TSMC manufactures a broad range of integrated circuits, including advanced logic chips used in high-performance computing, smartphones, automotive systems, communications equipment, and consumer electronics.

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