Taiwan Semiconductor Manufacturing (NYSE:TSM) vs. TOYO (NASDAQ:TOYO) Critical Contrast

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

Analyst Recommendations

This is a breakdown of current ratings for Taiwan Semiconductor Manufacturing and TOYO, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Taiwan Semiconductor Manufacturing	0	2	11	3	3.06
TOYO	1	1	2	0	2.25

Taiwan Semiconductor Manufacturing presently has a consensus target price of $528.78, indicating a potential upside of 22.44%. TOYO has a consensus target price of $14.00, indicating a potential upside of 247.39%. Given TOYO’s higher possible upside, analysts clearly believe TOYO is more favorable than Taiwan Semiconductor Manufacturing.

Volatility & Risk

Taiwan Semiconductor Manufacturing has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500. Comparatively, TOYO has a beta of 1.42, indicating that its stock price is 42% more volatile than the S&P 500.

Institutional and Insider Ownership

16.5% of Taiwan Semiconductor Manufacturing shares are held by institutional investors. Comparatively, 84.6% of TOYO shares are held by institutional investors. 1.1% of Taiwan Semiconductor Manufacturing shares are held by insiders. Comparatively, 0.3% of TOYO shares are held 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Taiwan Semiconductor Manufacturing	51.51%	42.84%	29.37%
TOYO	N/A	N/A	N/A

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Taiwan Semiconductor Manufacturing	$122.42 billion	18.30	$54.12 billion	$15.54	27.79
TOYO	$427.38 million	0.36	$39.66 million	$1.20	3.36

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

Summary

Taiwan Semiconductor Manufacturing beats TOYO on 11 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 TOYO

TOYO Co. Ltd. engages in the design, manufacture, and sale of solar cells and modules. It is involved in integrating the upstream production of wafer and silicon, midstream production of solar cell, downstream production of photovoltaic (PV) modules, and potentially other stages of the solar power supply chain. The company was founded on November 8, 2022 and is headquartered in Tokyo, Japan.