Broadcom Inc. (AVGO) vs Taiwan Semiconductor Manufacturing Company Ltd. (TSM)

Broadcom Inc. and Taiwan Semiconductor Manufacturing Company Ltd. are both Semiconductors companies. Taiwan Semiconductor Manufacturing Company Ltd. is the larger, with a market value of $2.36T against $1.70T — 1.4× the size. Taiwan Semiconductor Manufacturing Company Ltd. trades at the lower P/E: 32.5× against 43.8×. Broadcom Inc. grew revenue faster over the last twelve months: 48.7% against 35.6%. Taiwan Semiconductor Manufacturing Company Ltd. has the higher net margin (49.9% vs 42.9%) and the higher return on invested capital (39.7% vs 19.8%). Both pay a dividend; Broadcom Inc. yields more (1.64% vs 1.64%). Across the 22 metrics below, Taiwan Semiconductor Manufacturing Company Ltd. leads on 12 and Broadcom Inc. on 10.

Valuation

Metric AVGO TSM Semiconductors median
P/E 43.82 32.51 49.41
P/S 18.89 16.50 8.58
P/B 16.88 11.39 5.49
Price to free cash flow 42.72 65.78 47.02
EV/EBITDA 33.32 22.33 30.78
EV/Sales 19.29 15.93 8.79
Earnings yield 2.28% 3.08% 0.62%
Free cash flow yield 2.34% 1.52% 0.59%

Profitability

Metric AVGO TSM Semiconductors median
Gross margin 68.77% 64.20% 52.25%
Operating margin 48.05% 56.05% 4.85%
Net margin 42.94% 49.88% 4.77%
Free cash flow margin 44.22% 25.08% 8.65%
Return on equity 44.25% 39.78% 3.11%
Return on assets 21.63% 26.93% 1.91%
Return on invested capital 19.80% 39.72% 2.46%

Growth

Metric AVGO TSM Semiconductors median
Revenue growth (TTM) 48.69% 35.61% 16.66%
EPS growth (last fiscal year) 287.80% 51.28% —
Revenue growth, 5-year CAGR 21.74% 20.55% 5.60%
Net income growth, 5-year CAGR 54.08% 24.37% 0.00%

Health

Metric AVGO TSM Semiconductors median
Debt to equity 0.60 0.16 0.05
Current ratio 2.50 2.46 3.35
Net debt to EBITDA 1.43 (0.79) 0.58

Dividend

Metric AVGO TSM Semiconductors median
Dividend yield 1.64% 1.64% 1.93%
Payout ratio 0.55 0.30 0.00

Size

Metric AVGO TSM Semiconductors median
Market cap 1.70t 2.36t 5.67b

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