Taiwan Semiconductor Manufacturing ( NYSE:TSM ) and Photronics ( NASDAQ:PLAB ) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, profitability, risk and dividends.
Insider & Institutional Ownership
Get Taiwan Semiconductor Manufacturing alerts: 16.6% of Taiwan Semiconductor Manufacturing shares are owned by institutional investors. Comparatively, 88.8% of Photronics shares are owned by institutional investors. 1.1% of Taiwan Semiconductor Manufacturing shares are owned by insiders. Comparatively, 3.7% of Photronics shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Risk and Volatility
Taiwan Semiconductor Manufacturing has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500. Comparatively, Photronics has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500.
Earnings and Valuation
This table compares Taiwan Semiconductor Manufacturing and Photronics’ gross revenue, earnings per share and valuation.
Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio Taiwan Semiconductor Manufacturing $45.51 billion 13.10 $18.19 billion $3.39 33.91 Photronics $609.69 million 1.38 $33.82 million $0.52 26.50 Taiwan Semiconductor Manufacturing has higher revenue and earnings than Photronics. Photronics 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 for Taiwan Semiconductor Manufacturing and Photronics, as reported by MarketBeat.
Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score Taiwan Semiconductor Manufacturing 0 4 3 0 2.43 Photronics 0 1 1 0 2.50 Taiwan Semiconductor Manufacturing currently has a consensus target price of $127.01, indicating a potential upside of 10.48%. Photronics has a consensus target price of $16.50, indicating a potential upside of 19.74%. Given Photronics’ stronger consensus rating and higher possible upside, analysts plainly believe Photronics is more favorable than Taiwan Semiconductor Manufacturing.
Profitability
This table compares Taiwan Semiconductor Manufacturing and Photronics’ net margins, return on equity and return on assets.
Net Margins Return on Equity Return on Assets Taiwan Semiconductor Manufacturing 38.14% 29.17% 19.32% Photronics 6.66% 3.93% 3.11% Summary
Taiwan Semiconductor Manufacturing beats Photronics on 9 of the 14 factors compared between the two stocks.
About Taiwan Semiconductor Manufacturing
Taiwan Semiconductor Manufacturing Co., Ltd. engages in the manufacture and sale of integrated circuits and wafer semiconductor devices. Its chips are used in personal computers and peripheral products; information applications; wired and wireless communications systems products; automotive and industrial equipment including consumer electronics such as digital video compact disc player, digital television, game consoles, and digital cameras. The company was founded by Chung Mou Chang on February 21, 1987 and is headquartered in Hsinchu, Taiwan.
About Photronics
Photronics, Inc. manufactures photomasks with high precision photographic quartz or glass plates containing microscopic images of electronic circuits. It manufactures semiconductors and flat-panel displays and is used as masters to transfer circuit patterns onto semiconductor wafers and FPD substrates during the fabrication of integrated circuits, a variety of FPDs and other types of electrical and optical components. The company’s manufacturing facilities, which are located in Taiwan, Korea, the United States, and Europe. Photronics was founded by Constantine S. Macricostas in 1969 and is headquartered in Brookfield, CT.