Head to Head Analysis: Vimicro International (VIMC) and Taiwan Semiconductor Manufacturing (TSM)

Vimicro International (NASDAQ: VIMC) and Taiwan Semiconductor Manufacturing (NYSE:TSM) are both technology companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Earnings and Valuation

This table compares Vimicro International and Taiwan Semiconductor Manufacturing’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Vimicro International N/A N/A N/A $0.29 46.31
Taiwan Semiconductor Manufacturing $29.43 billion 7.47 $10.24 billion $2.14 19.82

Taiwan Semiconductor Manufacturing has higher revenue and earnings than Vimicro International. Taiwan Semiconductor Manufacturing is trading at a lower price-to-earnings ratio than Vimicro International, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

19.3% of Taiwan Semiconductor Manufacturing shares are owned by institutional investors. 1.1% of Taiwan Semiconductor Manufacturing shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for Vimicro International and Taiwan Semiconductor Manufacturing, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vimicro International 0 0 0 0 N/A
Taiwan Semiconductor Manufacturing 0 4 2 0 2.33

Taiwan Semiconductor Manufacturing has a consensus target price of $27.00, suggesting a potential downside of 36.34%. Given Taiwan Semiconductor Manufacturing’s higher probable upside, analysts plainly believe Taiwan Semiconductor Manufacturing is more favorable than Vimicro International.

Dividends

Taiwan Semiconductor Manufacturing pays an annual dividend of $0.92 per share and has a dividend yield of 2.2%. Vimicro International does not pay a dividend. Taiwan Semiconductor Manufacturing pays out 43.0% of its earnings in the form of a dividend. Taiwan Semiconductor Manufacturing has raised its dividend for 2 consecutive years.

Profitability

This table compares Vimicro International and Taiwan Semiconductor Manufacturing’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vimicro International 20.38% 17.78% 8.86%
Taiwan Semiconductor Manufacturing 35.71% 24.48% 17.90%

Risk and Volatility

Vimicro International has a beta of 0.39, indicating that its share price is 61% less volatile than the S&P 500. Comparatively, Taiwan Semiconductor Manufacturing has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500.

Summary

Taiwan Semiconductor Manufacturing beats Vimicro International on 12 of the 13 factors compared between the two stocks.

About Vimicro International

Vimicro International Corporation is a holding company. The Company is a provider of video surveillance technology and solutions that designs, develops and markets a range of video surveillance products and solutions to Government entities, private enterprises and consumers. It operates in two segments: Video surveillance solutions business and Video processors business. Video surveillance solutions business, which refers business activities that are engaged in the design, manufacture and sale of video surveillance solutions and products and provision of related services, and Video processors business, which refers business activities that are engaged in the design, manufacture and sale of video processors, including the video processors used in video surveillance solutions and personal computer camera processors. It provides video surveillance products and solutions ranging from front-end Internet Protocol cameras to back-end software platform using its chip and algorithm technology.

About Taiwan Semiconductor Manufacturing

Taiwan Semiconductor Manufacturing Company Limited (TSMC) is a semiconductor foundry. The Company is engaged in the manufacturing, selling, packaging, testing and computer-aided design of integrated circuits and other semiconductor devices and the manufacturing of masks. It operates through foundry segment. The foundry segment is engaged in manufacturing, selling, packaging, testing and computer-aided design of integrated circuits (IC) and other semiconductor devices and the manufacturing of masks. It operates three 12-inch wafer fabs, four eight-inch wafer fabs, one six-inch wafer fab (fab 2) and two backend fabs (advanced backend fab 1 and 2). It also manages two eight-inch fabs at its subsidiaries, WaferTech, LLC in the United States and TSMC China Company Limited. Its exploratory work focuses on transistors and technologies, such as three dimensional (3D) structures, strained-layer complementary metal-oxide semiconductor (CMOS), high-mobility materials and 3D IC devices.

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