Taiwan Semiconductor Mfg. (TSM) & Thermon Group (THR) Financial Analysis

Taiwan Semiconductor Mfg. (NYSE: TSM) and Thermon Group (NYSE:THR) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, analyst recommendations and earnings.

Profitability

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

Net Margins Return on Equity Return on Assets
Taiwan Semiconductor Mfg. 35.08% 23.73% 17.60%
Thermon Group 3.33% 5.16% 3.27%

Dividends

Taiwan Semiconductor Mfg. pays an annual dividend of $0.92 per share and has a dividend yield of 2.2%. Thermon Group does not pay a dividend. Taiwan Semiconductor Mfg. pays out 42.4% of its earnings in the form of a dividend. Taiwan Semiconductor Mfg. has raised its dividend for 3 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings for Taiwan Semiconductor Mfg. and Thermon Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Taiwan Semiconductor Mfg. 0 4 5 0 2.56
Thermon Group 1 1 3 0 2.40

Taiwan Semiconductor Mfg. currently has a consensus target price of $34.50, suggesting a potential downside of 18.67%. Thermon Group has a consensus target price of $25.33, suggesting a potential upside of 13.40%. Given Thermon Group’s higher probable upside, analysts clearly believe Thermon Group is more favorable than Taiwan Semiconductor Mfg..

Institutional and Insider Ownership

19.3% of Taiwan Semiconductor Mfg. shares are held by institutional investors. 1.1% of Taiwan Semiconductor Mfg. shares are held by insiders. Comparatively, 1.2% of Thermon Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Risk & Volatility

Taiwan Semiconductor Mfg. has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500. Comparatively, Thermon Group has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500.

Valuation & Earnings

This table compares Taiwan Semiconductor Mfg. and Thermon Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Taiwan Semiconductor Mfg. $32.11 billion 6.85 $11.29 billion $2.17 19.55
Thermon Group $264.13 million 2.75 $14.64 million $0.43 51.95

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

Summary

Taiwan Semiconductor Mfg. beats Thermon Group on 12 of the 16 factors compared between the two stocks.

Taiwan Semiconductor Mfg. Company Profile

Taiwan Semiconductor Manufacturing Company Limited., together with its subsidiaries, engages in the computer-aided design, manufacture, packaging, testing, sale, and marketing of integrated circuits, color filters, and other semiconductor devices primarily in Taiwan. It manufactures masks and electronic parts; sells solar related products; wholesales and retails electronic materials; and researches, develops, and tests RFID systems. The company is also involved in customer service and technical supporting, marketing and engineering supporting, and investment activities. It also operates in the United States, Asia, Europe, the Middle East, Africa, and other countries. Taiwan Semiconductor Manufacturing Company Limited was founded in 1987 and is headquartered in HsinChu, Taiwan.

Thermon Group Company Profile

Thermon Group Holdings, Inc. provides thermal engineered industrial process heating solutions for process industries in the United States, Canada, Europe, and Asia. Its products include various electric heat tracing cables, steam tracing components, tubing bundles, and instrument and control products, as well as complementary product lines. The company offers self-regulating and power limiting heating cables, which automatically increase or decrease heat output as pipe temperature changes, as well as constant wattage heating cables; mineral insulated cables for generating high temperatures used in harsh environments; skin effect trace heaters, which could heat lines up to 15 miles long from a single power point; and heat traced tube bundles for environmental gas sampling systems. It also provides heat transfer compounds and steam tracers for steam tracing solutions; control and monitoring systems for electric tracing of pipes, tanks, hoppers, and instrument sampling systems; hopper heating modules, which are self-contained heaters for use in cement plants and fossil fuel power facilities; and turnkey solutions that provide solutions for heat tracing comprising design, optimization, planning, product supply, engineering services, system integration, installation, commissioning, and maintenance. In addition, the company offers heating, sensing, monitoring, controlling, and calibration tools; and equipment for temporary electric power distribution and lighting products used in energy infrastructure construction projects and maintenance/turnaround projects. The company offers its solutions to the oil and gas, chemical processing, and power generation markets through a network of sales and service professionals, and distributors. Thermon Group Holdings, Inc. is headquartered in San Marcos, Texas.

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