Head to Head Comparison: Himax Technologies (NASDAQ:HIMX) versus Taiwan Semiconductor Manufacturing (NYSE:TSM)

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

Earnings and Valuation

This table compares Taiwan Semiconductor Manufacturing and Himax Technologies”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Taiwan Semiconductor Manufacturing	$2,651.38 billion	0.41	$27.82 billion	$6.24	33.22
Himax Technologies	$897.26 million	1.53	$50.62 million	$0.44	17.89

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

Profitability

This table compares Taiwan Semiconductor Manufacturing and Himax Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Taiwan Semiconductor Manufacturing	39.10%	27.44%	17.49%
Himax Technologies	8.77%	9.06%	4.78%

Analyst Ratings

This is a breakdown of current ratings for Taiwan Semiconductor Manufacturing and Himax Technologies, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Taiwan Semiconductor Manufacturing	0	1	4	0	2.80
Himax Technologies	0	0	1	0	3.00

Taiwan Semiconductor Manufacturing presently has a consensus price target of $214.00, suggesting a potential upside of 3.23%. Himax Technologies has a consensus price target of $15.00, suggesting a potential upside of 90.60%. Given Himax Technologies’ stronger consensus rating and higher possible upside, analysts clearly believe Himax Technologies is more favorable than Taiwan Semiconductor Manufacturing.

Insider & Institutional Ownership

16.5% of Taiwan Semiconductor Manufacturing shares are held by institutional investors. Comparatively, 69.8% of Himax Technologies shares are held by institutional investors. 1.1% of Taiwan Semiconductor Manufacturing shares are held by insiders. Comparatively, 31.5% of Himax Technologies shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Taiwan Semiconductor Manufacturing has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500. Comparatively, Himax Technologies has a beta of 1.94, indicating that its stock price is 94% more volatile than the S&P 500.

Dividends

Taiwan Semiconductor Manufacturing pays an annual dividend of $2.19 per share and has a dividend yield of 1.1%. Himax Technologies pays an annual dividend of $0.28 per share and has a dividend yield of 3.6%. Taiwan Semiconductor Manufacturing pays out 35.1% of its earnings in the form of a dividend. Himax Technologies pays out 63.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Summary

Taiwan Semiconductor Manufacturing beats Himax Technologies on 9 of the 16 factors compared between the two stocks.

About Taiwan Semiconductor Manufacturing

Taiwan Semiconductor Manufacturing Company Limited, together with its subsidiaries, manufactures, packages, tests, and sells integrated circuits and other semiconductor devices in Taiwan, China, Europe, the Middle East, Africa, Japan, the United States, and internationally. It provides a range of wafer fabrication processes, including processes to manufacture complementary metal- oxide-semiconductor (CMOS) logic, mixed-signal, radio frequency, embedded memory, bipolar CMOS mixed-signal, and others. The company also offers customer and engineering support services; manufactures masks; and invests in technology start-up companies; researches, designs, develops, manufactures, packages, tests, and sells color filters; and provides investment services. Its products are used in high performance computing, smartphones, Internet of things, automotive, and digital consumer electronics. The company was incorporated in 1987 and is headquartered in Hsinchu City, Taiwan.

About Himax Technologies

Himax Technologies, Inc., a fabless semiconductor company, provides display imaging processing technologies in China, Taiwan, the Philippines, Korea, Japan, Europe, and the United States. The company operates in two segments, Driver IC and Non-Driver Products. It offers display driver integrated circuits (ICs) and timing controllers that are used in televisions, PC monitors, laptops, mobile phones, tablets, automotive, ePaper devices, industrial displays, and other products. The company also provides automotive IC solutions, including traditional driver ICs; advanced in-cell touch and display driver integration; large touch and display driver integration; and local dimming timing controllers, as well as active matrix organic light-emitting diode (AMOLED) solutions, including AMOLED drivers, timing controllers, and touch controller ICs. In addition, it offers application specific IC services; liquid crystal on silicon and micro-electro mechanical system products; Power ICs; complementary metal oxide semiconductor image sensor products; wafer level optics products; 3D sensing products; and ultralow power WiseEye smart image sensing products. The company markets its display drivers to panel manufacturers, mobile device module manufacturers, and manufacturers of end-use products. Himax Technologies, Inc. was incorporated in 2001 and is headquartered in Tainan City, Taiwan.