Taiwan Semiconductor vs NVIDIA Which Is Stronger?

Taiwan Semiconductor Manufacturing Company (TSMC) and NVIDIA Corporation are two highly influential companies in the semiconductor industry. TSMC is the world's largest semiconductor foundry, specializing in manufacturing advanced chips for a wide range of electronic devices. NVIDIA is a leading provider of graphics processing units (GPUs) used in gaming, artificial intelligence, and autonomous vehicles. Both companies have experienced significant growth in recent years, but investors may consider factors such as technological advancements, market demand, and global competition when evaluating their stocks for investment opportunities.

Taiwan Semiconductor or NVIDIA?

When comparing Taiwan Semiconductor and NVIDIA, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Taiwan Semiconductor and NVIDIA.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Taiwan Semiconductor has a dividend yield of 3.19%, while NVIDIA has a dividend yield of 0.03%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Taiwan Semiconductor reports a 5-year dividend growth of 6.05% year and a payout ratio of 177.19%. On the other hand, NVIDIA reports a 5-year dividend growth of -23.48% year and a payout ratio of 1.02%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Taiwan Semiconductor P/E ratio at 27.64 and NVIDIA's P/E ratio at 67.35. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Taiwan Semiconductor P/B ratio is 2.06 while NVIDIA's P/B ratio is 61.39.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Taiwan Semiconductor has seen a 5-year revenue growth of 0.48%, while NVIDIA's is 1.68%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Taiwan Semiconductor's ROE at 7.26% and NVIDIA's ROE at 115.52%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are NT$62.00 for Taiwan Semiconductor and $143.57 for NVIDIA. Over the past year, Taiwan Semiconductor's prices ranged from NT$51.20 to NT$98.90, with a yearly change of 93.16%. NVIDIA's prices fluctuated between $45.01 and $149.77, with a yearly change of 232.75%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.