Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, contract chip giant Taiwan Semiconductor Manufacturing (NYSE: TSM ) has earned a coveted five-star ranking.
With that in mind, let's take a closer look at TSMC's business and see what CAPS investors are saying about the stock right now.
TSMC facts
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Headquarters (Founded)
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Hsinchu, Taiwan (1987)
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Market Cap
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$64.7 billion
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Industry
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Semiconductors
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Trailing-12-Month Revenue
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$14.9 billion
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Management
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Chairman/CEO Dr. Morris Chang
CFO Lora Ho
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Return on Equity (Average, Past 3 Years)
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22.5%
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Cash/Debt
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$5.7 billion / $1.4 billion
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Dividend Yield
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4.2%
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Competitors
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Semiconductor Manufacturing (NYSE: SMI )
United Microelectronics (NYSE: UMC )
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Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 97% of the 1,402 members who have rated Taiwan Semiconductor believe the stock will outperform the S&P 500 going forward. These bulls include rheddman and All-Star Bama99, who is ranked in the top 10% of our community.
Just last week, rheddman tapped Taiwan Semiconductor as a tasty way to bite into Apple (Nasdaq: AAPL ) : "They are about to start manufacturing Apple's new processors. Should help out their company and drive up its stock."
Taiwan Semiconductor even boasts a robust three-year average operating margin of 33.5%. That's much higher than that of direct rival United Microelectronics (5.8%), let alone Semiconductor Manufacturing's negative average margin of 19.3%.
CAPS All-Star Bama99 elaborates on the bull case:
Analysts are dog piling on the entire semiconductor industry right now, expecting low growth and maybe they are right, but it won't last long. Consumers like their electronic gadgets, and even recessions aren't stopping them from getting their iPods and IPad's.
And the bad news is already priced in the stock, so our downside risk is limited.
So the stock is cheap, but cheap stocks can always get cheaper. ...
The company keeps very little debt on the books and pays a nice dividend while you wait for the stock to rebound. When the recovery hits full steam, this stock should soar.
What do you think about Taiwan Semiconductor, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
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