Adobe (NASDAQ:ADBE) and Taiwan Semiconductor Manufacturing (NYSE:TSM) are both large-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, earnings, profitability, valuation and dividends.
Analyst Recommendations
This is a breakdown of recent ratings and price targets for Adobe and Taiwan Semiconductor Manufacturing, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Adobe | 0 | 4 | 23 | 0 | 2.85 |
| Taiwan Semiconductor Manufacturing | 0 | 4 | 3 | 0 | 2.43 |
Adobe presently has a consensus price target of $631.64, suggesting a potential downside of 4.17%. Taiwan Semiconductor Manufacturing has a consensus price target of $127.0083, suggesting a potential upside of 5.34%. Given Taiwan Semiconductor Manufacturing's higher probable upside, analysts clearly believe Taiwan Semiconductor Manufacturing is more favorable than Adobe.
Volatility & Risk
Adobe has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500. Comparatively, Taiwan Semiconductor Manufacturing has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500.
Insider & Institutional Ownership
81.7% of Adobe shares are held by institutional investors. Comparatively, 16.6% of Taiwan Semiconductor Manufacturing shares are held by institutional investors. 0.2% of Adobe shares are held by company insiders. Comparatively, 1.1% of Taiwan Semiconductor Manufacturing shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares Adobe and Taiwan Semiconductor Manufacturing's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Adobe | $12.87 billion | 24.41 | $5.26 billion | $8.58 | 76.86 |
| Taiwan Semiconductor Manufacturing | $45.51 billion | 13.74 | $18.19 billion | $3.39 | 35.56 |
Taiwan Semiconductor Manufacturing has higher revenue and earnings than Adobe. Taiwan Semiconductor Manufacturing is trading at a lower price-to-earnings ratio than Adobe, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Adobe and Taiwan Semiconductor Manufacturing's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Adobe | 38.79% | 35.94% | 19.35% |
| Taiwan Semiconductor Manufacturing | 38.14% | 29.17% | 19.32% |
Summary
Adobe beats Taiwan Semiconductor Manufacturing on 10 of the 14 factors compared between the two stocks.
