Silicon Motion Technology (NASDAQ:SIMO) and Taiwan Semiconductor Mfg. (NYSE:TSM) 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, analyst recommendations, profitability, institutional ownership, valuation, risk and dividends.
This is a breakdown of recent recommendations and price targets for Silicon Motion Technology and Taiwan Semiconductor Mfg., as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Silicon Motion Technology||1||1||8||0||2.70|
|Taiwan Semiconductor Mfg.||1||1||2||0||2.25|
Earnings & Valuation
This table compares Silicon Motion Technology and Taiwan Semiconductor Mfg.’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Silicon Motion Technology||$530.35 million||2.90||$98.07 million||$3.41||12.50|
|Taiwan Semiconductor Mfg.||$34.20 billion||6.34||$11.86 billion||$2.24||18.67|
Taiwan Semiconductor Mfg. has higher revenue and earnings than Silicon Motion Technology. Silicon Motion Technology 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.
Insider and Institutional Ownership
69.9% of Silicon Motion Technology shares are held by institutional investors. Comparatively, 19.6% of Taiwan Semiconductor Mfg. shares are held by institutional investors. 1.1% of Taiwan Semiconductor Mfg. shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Risk and Volatility
Silicon Motion Technology has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500. Comparatively, Taiwan Semiconductor Mfg. has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500.
Silicon Motion Technology pays an annual dividend of $1.19 per share and has a dividend yield of 2.8%. Taiwan Semiconductor Mfg. pays an annual dividend of $1.01 per share and has a dividend yield of 2.4%. Silicon Motion Technology pays out 34.9% of its earnings in the form of a dividend. Taiwan Semiconductor Mfg. pays out 45.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Silicon Motion Technology has increased its dividend for 3 consecutive years and Taiwan Semiconductor Mfg. has increased its dividend for 4 consecutive years. Silicon Motion Technology is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Silicon Motion Technology and Taiwan Semiconductor Mfg.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Silicon Motion Technology||17.28%||19.04%||15.40%|
|Taiwan Semiconductor Mfg.||32.20%||19.91%||15.51%|
Taiwan Semiconductor Mfg. beats Silicon Motion Technology on 11 of the 17 factors compared between the two stocks.
About Silicon Motion Technology
Silicon Motion Technology Corporation, together with its subsidiaries, designs, develops, and markets semiconductor solutions for the mobile and enterprise storage, and mobile communications markets worldwide. It offers embedded storage and expandable storage products, including NAND flash controllers, such as embedded multimediacard (eMMC), universal flash storage, client solid-state drive (SSD), secure digital card, flash memory card controller, and universal serial bus flash drive controller products. The company also provides specialty storage solutions, such as customized enterprise-grade peripheral component interconnect express SSDs; and industrial-grade and commercial-grade single-chip SSDs. In addition, it offers specialty radio frequency integrated circuits (RF ICs), such as mobile TV system-on-chips (SoCs) and low power WiFi SoCs. The company's products are used in smartphones, tablets, digital cameras, camcorders, and desktop and notebook PCs, as well as in industrial, enterprise, commercial, and other applications. It offers its controllers under the SMI brand; enterprise-grade SSDs under the Shannon brand; single-chip industrial-grade SSDs under the Ferri SSD and Ferri-eMMC brands; RF ICs under the FCI brand; and software-defined storage products under the Bigtera brand. The company markets and sells its products through direct sales personnel and independent electronics distributors to flash manufacturers, original equipment manufacturers, and module makers. Silicon Motion Technology Corporation was founded in 1995 and is based in Kowloon, Hong Kong.
About Taiwan Semiconductor Mfg.
Taiwan Semiconductor Manufacturing Company Limited, together with its subsidiaries, engages in manufacturing, selling, packaging, testing, and computer-aided design of integrated circuits and other semiconductor devices. The company manufactures masks and electronic spare parts; researches, develops, designs, manufactures, sells, packages, and tests color filters; and offers customer and engineering support services. It is also involved in investing activities. The company operates in North America, China, Japan, Asia Pacific, Europe, the Middle East, and Africa. Taiwan Semiconductor Manufacturing Company Limited was founded in 1987 and is headquartered in HsinChu, Taiwan.
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