Taiwan Semiconductor Manufacturing (NYSE: TSM) and MoSys (NASDAQ:MOSY) are both computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, profitabiliy, dividends, analyst recommendations, risk and institutional ownership.

Institutional & Insider Ownership

19.9% of Taiwan Semiconductor Manufacturing shares are owned by institutional investors. Comparatively, 26.9% of MoSys shares are owned by institutional investors. 1.1% of Taiwan Semiconductor Manufacturing shares are owned by insiders. Comparatively, 6.8% of MoSys shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Taiwan Semiconductor Manufacturing and MoSys, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Taiwan Semiconductor Manufacturing 0 3 2 0 2.40
MoSys 0 1 0 0 2.00

Taiwan Semiconductor Manufacturing presently has a consensus price target of $27.50, indicating a potential downside of 22.18%. MoSys has a consensus price target of $20.00, indicating a potential upside of 2,050.54%. Given MoSys’ higher probable upside, analysts plainly believe MoSys is more favorable than Taiwan Semiconductor Manufacturing.

Profitability

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

Net Margins Return on Equity Return on Assets
Taiwan Semiconductor Manufacturing 36.11% 25.65% 18.55%
MoSys -497.92% -142.34% -88.48%

Valuation and Earnings

This table compares Taiwan Semiconductor Manufacturing and MoSys’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Taiwan Semiconductor Manufacturing $32.06 billion 5.72 $20.72 billion $2.16 16.36
MoSys $5.54 million 1.12 -$14.86 million N/A N/A

Taiwan Semiconductor Manufacturing has higher revenue and earnings than MoSys.

Volatility & Risk

Taiwan Semiconductor Manufacturing has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500. Comparatively, MoSys has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500.

Dividends

Taiwan Semiconductor Manufacturing pays an annual dividend of $0.92 per share and has a dividend yield of 2.6%. MoSys does not pay a dividend. Taiwan Semiconductor Manufacturing pays out 42.6% of its earnings in the form of a dividend. Taiwan Semiconductor Manufacturing has increased its dividend for 2 consecutive years.

Summary

Taiwan Semiconductor Manufacturing beats MoSys on 11 of the 15 factors compared between the two stocks.

Taiwan Semiconductor Manufacturing Company Profile

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.

MoSys Company Profile

MoSys, Inc. (MoSys), together with its subsidiaries, is a fabless semiconductor company focused on the development and sale of integrated circuits (ICs) for the high-speed networking, communications, storage and computing markets. The Company has developed approximately two IC product lines under the Bandwidth Engine and LineSpeed product names. Bandwidth Engine ICs integrate its 1T-SRAM high-density embedded memory with its integrated macro function technology and a serial interface protocol resulting in a monolithic memory IC solution optimized for transaction performance. The LineSpeed IC product line consists of non-memory, high-speed serialization-deserialization (SerDes), input/output (I/O) physical layer (PHY) devices with clock data recovery, gearbox and retimer functionality, which convert lanes of data received on line cards or by optical modules into various configurations and/or ensure signal integrity.

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