Taiwan Semiconductor Manufacturing (NYSE:TSM) and SemiLEDs (NASDAQ:LEDS) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, dividends, risk, valuation, analyst recommendations and institutional ownership.
Analyst Ratings
This is a summary of recent ratings and recommmendations for Taiwan Semiconductor Manufacturing and SemiLEDs, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Taiwan Semiconductor Manufacturing | 2 | 0 | 6 | 0 | 2.50 |
| SemiLEDs | 0 | 0 | 0 | 0 | N/A |
Taiwan Semiconductor Manufacturing presently has a consensus target price of $99.00, suggesting a potential downside of 21.39%. Given Taiwan Semiconductor Manufacturing's higher probable upside, analysts clearly believe Taiwan Semiconductor Manufacturing is more favorable than SemiLEDs.
Profitability
This table compares Taiwan Semiconductor Manufacturing and SemiLEDs' 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% |
| SemiLEDs | -17.69% | -36.29% | -6.28% |
Valuation & Earnings
This table compares Taiwan Semiconductor Manufacturing and SemiLEDs' 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 | 18.86 | $11.83 billion | $3.39 | 37.15 |
| SemiLEDs | $6.07 million | 3.41 | $-540,000.00 | N/A | N/A |
Taiwan Semiconductor Manufacturing has higher revenue and earnings than SemiLEDs.
Institutional and Insider Ownership
18.3% of Taiwan Semiconductor Manufacturing shares are held by institutional investors. Comparatively, 5.8% of SemiLEDs shares are held by institutional investors. 1.1% of Taiwan Semiconductor Manufacturing shares are held by insiders. Comparatively, 52.6% of SemiLEDs shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Risk and Volatility
Taiwan Semiconductor Manufacturing has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500. Comparatively, SemiLEDs has a beta of 1.67, meaning that its stock price is 67% more volatile than the S&P 500.
Summary
Taiwan Semiconductor Manufacturing beats SemiLEDs on 10 of the 12 factors compared between the two stocks.
