Financial Analysis: Taiwan Semiconductor Mfg. (TSM) and Supertex (SUPX)

Taiwan Semiconductor Mfg. (NYSE: TSM) and Supertex (NASDAQ:SUPX) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, analyst recommendations, valuation, dividends and profitability.

Analyst Ratings

This is a summary of current ratings and price targets for Taiwan Semiconductor Mfg. and Supertex, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Taiwan Semiconductor Mfg. 0 5 2 0 2.29
Supertex 0 0 0 0 N/A

Taiwan Semiconductor Mfg. presently has a consensus target price of $27.00, suggesting a potential downside of 31.54%.

Earnings & Valuation

This table compares Taiwan Semiconductor Mfg. and Supertex’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Taiwan Semiconductor Mfg. $29.43 billion 6.95 $10.24 billion $2.14 18.43
Supertex N/A N/A N/A $0.85 N/A

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

Profitability

This table compares Taiwan Semiconductor Mfg. and Supertex’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Taiwan Semiconductor Mfg. 35.71% 24.48% 17.90%
Supertex N/A N/A N/A

Insider and Institutional Ownership

19.4% of Taiwan Semiconductor Mfg. shares are owned by institutional investors. 1.1% of Taiwan Semiconductor Mfg. shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Taiwan Semiconductor Mfg. pays an annual dividend of $0.92 per share and has a dividend yield of 2.3%. Supertex does not pay a dividend. Taiwan Semiconductor Mfg. pays out 43.0% of its earnings in the form of a dividend. Taiwan Semiconductor Mfg. has increased its dividend for 2 consecutive years.

Summary

Taiwan Semiconductor Mfg. beats Supertex on 10 of the 11 factors compared between the two stocks.

About Taiwan Semiconductor Mfg.

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.

About Supertex

Supertex, Inc. is a producer of high voltage analog and mixed signal semiconductor components. The Company designs, develops, manufactures, and markets integrated circuits (ICs), utilizing high voltage DMOS, HVCMOS and HVBiCMOS analog and mixed signal technologies. These ICs are used in the medical ultrasound imaging, light emitting diodes (LED) backlighting for monitors and liquid-crystal display (LCD) television (TVs), LED general lighting, telecommunications, printer, flat panel display, industrial and consumer product industries. It markets and sells its products through direct sales personnel, independent sales representatives and distributors in the United States and abroad, to original equipment manufacturers (OEM’s) of electronic products. The Company operates in one business segment consisting of the design, development, manufacturing and marketing of high voltage analog and mixed signal integrated circuits.

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