Taiwan Semiconductor Manufacturing (NYSE:TSM) and Facebook (NASDAQ:FB) are both large-cap computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, risk and profitability.
Volatility & Risk
Taiwan Semiconductor Manufacturing has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500. Comparatively, Facebook has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500.
Valuation and Earnings
This table compares Taiwan Semiconductor Manufacturing and Facebook's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Taiwan Semiconductor Manufacturing | $34.63 billion | 18.53 | $11.83 billion | $3.39 | 36.51 |
Facebook | $70.70 billion | 11.10 | $18.49 billion | $6.43 | 42.84 |
Facebook has higher revenue and earnings than Taiwan Semiconductor Manufacturing. Taiwan Semiconductor Manufacturing is trading at a lower price-to-earnings ratio than Facebook, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current ratings and price targets for Taiwan Semiconductor Manufacturing and Facebook, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Taiwan Semiconductor Manufacturing | 2 | 0 | 6 | 0 | 2.50 |
Facebook | 1 | 4 | 39 | 1 | 2.89 |
Taiwan Semiconductor Manufacturing currently has a consensus target price of $99.00, suggesting a potential downside of 19.90%. Facebook has a consensus target price of $308.9756, suggesting a potential upside of 12.46%. Given Facebook's stronger consensus rating and higher probable upside, analysts clearly believe Facebook is more favorable than Taiwan Semiconductor Manufacturing.
Insider & Institutional Ownership
18.3% of Taiwan Semiconductor Manufacturing shares are held by institutional investors. Comparatively, 65.0% of Facebook shares are held by institutional investors. 1.1% of Taiwan Semiconductor Manufacturing shares are held by insiders. Comparatively, 14.1% of Facebook shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Profitability
This table compares Taiwan Semiconductor Manufacturing and Facebook'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% |
Facebook | 32.00% | 23.27% | 18.12% |
Summary
Facebook beats Taiwan Semiconductor Manufacturing on 10 of the 15 factors compared between the two stocks.