eMagin (NYSE: EMAN) and Taiwan Semiconductor Manufacturing (NYSE:TSM) are both technology companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, dividends, valuation and earnings.

Insider and Institutional Ownership

19.5% of Taiwan Semiconductor Manufacturing shares are held by institutional investors. 1.1% of Taiwan Semiconductor Manufacturing shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
eMagin -43.16% -44.28% -32.83%
Taiwan Semiconductor Manufacturing 36.11% 25.61% 18.51%

Dividends

Taiwan Semiconductor Manufacturing pays an annual dividend of $0.92 per share and has a dividend yield of 2.5%. eMagin does not pay a dividend. Taiwan Semiconductor Manufacturing pays out 42.6% of its earnings in the form of a dividend. Taiwan Semiconductor Manufacturing has increased its dividend for 2 consecutive years.

Analyst Recommendations

This is a breakdown of recent recommendations for eMagin and Taiwan Semiconductor Manufacturing, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
eMagin 0 0 3 0 3.00
Taiwan Semiconductor Manufacturing 0 3 2 0 2.40

eMagin presently has a consensus target price of $4.67, suggesting a potential upside of 117.05%. Taiwan Semiconductor Manufacturing has a consensus target price of $27.50, suggesting a potential downside of 26.11%. Given eMagin’s stronger consensus rating and higher possible upside, equities analysts plainly believe eMagin is more favorable than Taiwan Semiconductor Manufacturing.

Valuation and Earnings

This table compares eMagin and Taiwan Semiconductor Manufacturing’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
eMagin $20.19 million 3.72 -$8.22 million N/A N/A
Taiwan Semiconductor Manufacturing $32.00 billion 6.03 $20.65 billion $2.16 17.23

Taiwan Semiconductor Manufacturing has higher revenue and earnings than eMagin.

Summary

Taiwan Semiconductor Manufacturing beats eMagin on 10 of the 14 factors compared between the two stocks.

eMagin Company Profile

eMagin Corporation is engaged in the manufacture of microdisplays using organic light emitting diode (OLED) technology. The Company designs, develops, manufactures and markets OLED on silicon microdisplays, virtual imaging products that utilizes OLED microdisplays and related products. The Company also performs research in the OLED field. The Company’s virtual imaging products integrate OLED technology with silicon chips to produce microdisplays smaller than one-inch diagonally, which when viewed through a magnifier, create virtual images that appear comparable in size to that of a computer monitor or a large-screen television. The Company offers its products to OEMs and other buyers as both separate components, integrated bundles coupled with its own optics, or full systems. The Company also offers engineering support. Its products include SVGA+ OLED Microdisplay Series, Digital SVGA OLED-XL, SXGA096 OLED-XL/XLS, SXGA OLED-XL, WUXGA OLED-XL, VGA OLED-XL and Integrated Modules.

Taiwan Semiconductor Manufacturing Company Profile

Taiwan Semiconductor Manufacturing Company Limited (TSMC) is a semiconductor foundry. The Company is engaged in the manufacturing, selling, packaging, testing and computer-aided design of integrated circuits and other semiconductor devices and the manufacturing of masks. It operates through foundry segment. The foundry segment is engaged in manufacturing, selling, packaging, testing and computer-aided design of integrated circuits (IC) and other semiconductor devices and the manufacturing of masks. It operates three 12-inch wafer fabs, four eight-inch wafer fabs, one six-inch wafer fab (fab 2) and two backend fabs (advanced backend fab 1 and 2). It also manages two eight-inch fabs at its subsidiaries, WaferTech, LLC in the United States and TSMC China Company Limited. Its exploratory work focuses on transistors and technologies, such as three dimensional (3D) structures, strained-layer complementary metal-oxide semiconductor (CMOS), high-mobility materials and 3D IC devices.

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