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

Analyst Recommendations

This is a summary of current ratings and target prices for Nlight and Taiwan Semiconductor Mfg., as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nlight 1 4 4 1 2.50
Taiwan Semiconductor Mfg. 1 1 3 0 2.40

Nlight currently has a consensus target price of $29.22, indicating a potential upside of 19.42%. Given Nlight’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Nlight is more favorable than Taiwan Semiconductor Mfg..

Profitability

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

Net Margins Return on Equity Return on Assets
Nlight 7.28% 8.37% 6.55%
Taiwan Semiconductor Mfg. 34.04% 21.96% 17.08%

Dividends

Taiwan Semiconductor Mfg. pays an annual dividend of $1.04 per share and has a dividend yield of 2.3%. Nlight does not pay a dividend. Taiwan Semiconductor Mfg. pays out 46.4% of its earnings in the form of a dividend. Taiwan Semiconductor Mfg. has raised its dividend for 4 consecutive years.

Institutional and Insider Ownership

75.8% of Nlight shares are held by institutional investors. Comparatively, 19.4% of Taiwan Semiconductor Mfg. shares are held by institutional investors. 1.1% of Taiwan Semiconductor Mfg. shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nlight $191.36 million 4.70 $13.94 million $0.32 76.47
Taiwan Semiconductor Mfg. $34.20 billion 6.89 $11.66 billion $2.24 20.27

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

Summary

Taiwan Semiconductor Mfg. beats Nlight on 10 of the 17 factors compared between the two stocks.

Nlight Company Profile

nLIGHT, Inc. designs, develops, and manufactures semiconductor and fiber lasers used in the industrial, microfabrication, and aerospace and defense markets. The company also produces optical fiber products. It markets and sells its products to original equipment manufacturer primarily through direct sales force in the United States, China, South Korea, Germany, and Finland, as well as through various independent sales representatives and distributors in Asia and Europe. The company was formerly known as nLight Photonics Corporation and changed its name to nLIGHT, Inc. in January 2016. nLIGHT, Inc. was founded in 2000 and is headquartered in Vancouver, Washington.

Taiwan Semiconductor Mfg. Company Profile

Taiwan Semiconductor Manufacturing Company Limited, together with its subsidiaries, engages in manufacturing, selling, packaging, testing, and computer-aided design of integrated circuits and other semiconductor devices. The company manufactures masks and electronic spare parts; researches, develops, designs, manufactures, sells, packages, and tests color filters; and offers customer and engineering support services. It is also involved in investing activities. The company operates in Taiwan, the United States, Asia, Europe, the Middle East, Africa, and internationally. Taiwan Semiconductor Manufacturing Company Limited was founded in 1987 and is headquartered in HsinChu, Taiwan.

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