Taiwan Semiconductor Manufacturing (NYSE:TSM) and Alphabet (NASDAQ:GOOG) are both large-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, risk and institutional ownership.
Volatility & Risk
Taiwan Semiconductor Manufacturing has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500. Comparatively, Alphabet has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500.
Institutional and Insider Ownership
18.5% of Taiwan Semiconductor Manufacturing shares are owned by institutional investors. Comparatively, 31.9% of Alphabet shares are owned by institutional investors. 1.1% of Taiwan Semiconductor Manufacturing shares are owned by insiders. Comparatively, 13.0% of Alphabet shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares Taiwan Semiconductor Manufacturing and Alphabet's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Taiwan Semiconductor Manufacturing | $34.63 billion | 18.75 | $11.83 billion | $2.15 | 58.25 |
Alphabet | $161.86 billion | 7.26 | $34.34 billion | $51.56 | 33.67 |
Alphabet has higher revenue and earnings than Taiwan Semiconductor Manufacturing. Alphabet 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.
Analyst Recommendations
This is a breakdown of current ratings and target prices for Taiwan Semiconductor Manufacturing and Alphabet, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Taiwan Semiconductor Manufacturing | 1 | 0 | 6 | 0 | 2.71 |
Alphabet | 0 | 1 | 21 | 1 | 3.00 |
Taiwan Semiconductor Manufacturing currently has a consensus target price of $94.50, indicating a potential downside of 24.54%. Alphabet has a consensus target price of $1,836.3158, indicating a potential upside of 5.77%. Given Alphabet's stronger consensus rating and higher possible upside, analysts clearly believe Alphabet is more favorable than Taiwan Semiconductor Manufacturing.
Profitability
This table compares Taiwan Semiconductor Manufacturing and Alphabet's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Taiwan Semiconductor Manufacturing | 37.94% | 29.40% | 20.89% |
Alphabet | 20.80% | 17.31% | 12.68% |
Summary
Alphabet beats Taiwan Semiconductor Manufacturing on 10 of the 15 factors compared between the two stocks.