ARM Holdings PLC Sponsored ADR (ARM) vs Taiwan Semiconductor Manufacturing Company Ltd. (TSM)

ARM Holdings PLC Sponsored ADR and Taiwan Semiconductor Manufacturing Company Ltd. are both Semiconductors companies. Taiwan Semiconductor Manufacturing Company Ltd. is the larger, with a market value of $2.40T against $318.1B — 7.5× the size. Taiwan Semiconductor Manufacturing Company Ltd. trades at the lower P/E: 33.1× against 301×. Taiwan Semiconductor Manufacturing Company Ltd. grew revenue faster over the last twelve months: 35.6% against 25.1%. Taiwan Semiconductor Manufacturing Company Ltd. has the higher net margin (49.9% vs 20.3%) and the higher return on invested capital (39.7% vs 11.6%). Across the 22 metrics below, Taiwan Semiconductor Manufacturing Company Ltd. leads on 17 and ARM Holdings PLC Sponsored ADR on 5.

Valuation

Metric ARM TSM Semiconductors median
P/E 301.38 33.13 50.47
P/S 60.44 16.81 8.59
P/B 36.11 11.60 5.58
Price to free cash flow 211.71 67.04 47.71
EV/EBITDA 269.72 22.77 30.88
EV/Sales 59.69 16.24 8.84
Earnings yield 0.33% 3.02% 0.61%
Free cash flow yield 0.47% 1.49% 0.59%

Profitability

Metric ARM TSM Semiconductors median
Gross margin 97.54% 64.20% 52.25%
Operating margin 17.01% 56.05% 4.85%
Net margin 20.25% 49.88% 4.77%
Free cash flow margin 28.55% 25.08% 8.65%
Return on equity 13.35% 39.78% 3.11%
Return on assets 10.14% 26.93% 1.91%
Return on invested capital 11.56% 39.72% 2.46%

Growth

Metric ARM TSM Semiconductors median
Revenue growth (TTM) 25.12% 35.61% 16.66%
EPS growth (last fiscal year) 13.33% 51.28% 27.88%
Revenue growth, 5-year CAGR 12.73% 20.55% 5.60%
Net income growth, 5-year CAGR 10.49% 24.37% 0.00%

Health

Metric ARM TSM Semiconductors median
Debt to equity 0.00 0.16 0.05
Current ratio 5.25 2.46 3.35
Net debt to EBITDA (3.13) (0.79) 0.58

Dividend

Metric ARM TSM Semiconductors median
Dividend yield — 1.06% 1.06%
Payout ratio — 0.35 0.40

Size

Metric ARM TSM Semiconductors median
Market cap 318.05b 2.40t 5.80b

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