Comparing Taiwan Semiconductor Manufacturing (NYSE:TSM) & GCT Semiconductor (NYSE:GCTS)

Taiwan Semiconductor Manufacturing (NYSE:TSM) and GCT Semiconductor (NYSE:GCTS) are both computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, dividends, valuation and profitability.

Volatility and Risk

Taiwan Semiconductor Manufacturing has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500. Comparatively, GCT Semiconductor has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Taiwan Semiconductor Manufacturing and GCT Semiconductor, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Taiwan Semiconductor Manufacturing	0	1	5	0	2.83
GCT Semiconductor	0	0	1	0	3.00

Taiwan Semiconductor Manufacturing currently has a consensus target price of $217.00, suggesting a potential upside of 5.80%. GCT Semiconductor has a consensus target price of $5.00, suggesting a potential upside of 390.20%. Given GCT Semiconductor’s stronger consensus rating and higher probable upside, analysts plainly believe GCT Semiconductor is more favorable than Taiwan Semiconductor Manufacturing.

Valuation and Earnings

This table compares Taiwan Semiconductor Manufacturing and GCT Semiconductor”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Taiwan Semiconductor Manufacturing	$3,140.92 billion	0.34	$36.49 billion	$7.78	26.36
GCT Semiconductor	$6.36 million	7.78	-$2.00 million	($0.44)	-2.32

Taiwan Semiconductor Manufacturing has higher revenue and earnings than GCT Semiconductor. GCT Semiconductor 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.

Institutional & Insider Ownership

16.5% of Taiwan Semiconductor Manufacturing shares are held by institutional investors. Comparatively, 28.1% of GCT Semiconductor shares are held by institutional investors. 1.1% of Taiwan Semiconductor Manufacturing shares are held by company insiders. Comparatively, 0.2% of GCT Semiconductor shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Taiwan Semiconductor Manufacturing	40.51%	30.47%	19.55%
GCT Semiconductor	N/A	N/A	-27.81%

Summary

Taiwan Semiconductor Manufacturing beats GCT Semiconductor on 10 of the 14 factors compared between the two stocks.

About Taiwan Semiconductor Manufacturing

Taiwan Semiconductor Manufacturing Company Limited, together with its subsidiaries, manufactures, packages, tests, and sells integrated circuits and other semiconductor devices in Taiwan, China, Europe, the Middle East, Africa, Japan, the United States, and internationally. It provides a range of wafer fabrication processes, including processes to manufacture complementary metal- oxide-semiconductor (CMOS) logic, mixed-signal, radio frequency, embedded memory, bipolar CMOS mixed-signal, and others. The company also offers customer and engineering support services; manufactures masks; and invests in technology start-up companies; researches, designs, develops, manufactures, packages, tests, and sells color filters; and provides investment services. Its products are used in high performance computing, smartphones, Internet of things, automotive, and digital consumer electronics. The company was incorporated in 1987 and is headquartered in Hsinchu City, Taiwan.

About GCT Semiconductor

GCT Semiconductor Holding, Inc., operates as a fabless semiconductor company, designs, develops, and markets integrated circuits for the wireless semiconductor industry. The company provides RF and modem chipsets based on 4G LTE technology, including 4G LTE, 4.5G LTE Advanced, and 4.75G LTE Advanced-Pro. It also develops and sells cellular IoT chipsets for low-speed mobile networks such as eMTC/NB-IOT/Sigfox, and other network protocols; and 5G solutions. Its products and solutions are used in smartphones, tablets, hotspots, CPEs, USB dongles, routers, and M2M applications. The company sells its products directly or indirectly through distributors to original equipment manufacturers and original design manufacturers primarily in Taiwan, China, Korea and Japan, Europe, North America and South America. The company was formerly known as Global Communication Technology, Inc. GCT Semiconductor Holding, Inc. was founded in 1998 and is headquartered in San Jose, California.