ARM vs. TSM: A Head-to-Head Stock Comparison
UpdatedHere’s a clear look at ARM and TSM, comparing key factors like performance, valuation metrics, dividends, and financial strength. It’s built for investors or anyone curious to see how these two stocks match up.
Company Overview
TSM stands out with 994.57 billion USD in market value—about 7.21× ARM’s market cap of 137.89 billion USD.
ARM’s beta of 4.41 points to much larger expected swings compared to TSM’s calmer 1.32, suggesting both higher upside and downside potential.
ARM and TSM are both ADRs—easy access for U.S. investors to foreign shares without dealing with overseas exchanges.
| Symbol | ARM | TSM |
|---|---|---|
| Company Name | Arm Holdings plc American Depositary Shares | Taiwan Semiconductor Manufacturing Company Limited |
| Country | GB | TW |
| Sector | Technology | Technology |
| Industry | Semiconductors | Semiconductors |
| CEO | Mr. Rene Anthony Andrada Haas | Dr. C. C. Wei Ph.D. |
| Price | 130.45 USD | 191.76 USD |
| Market Cap | 137.89 billion USD | 994.57 billion USD |
| Beta | 4.41 | 1.32 |
| Exchange | NASDAQ | NYSE |
| IPO Date | September 14, 2023 | October 9, 1997 |
| ADR | Yes | Yes |
Performance Comparison
This chart compares the performance of ARM and TSM over the past year by tracking the growth of an initial $10,000 investment in each (starting one year ago).
Hover over the lines to see the investment’s value and total return (%) at specific dates.
Data is adjusted for dividends and splits.
Valuation Metrics Comparison
The section examines key financial ratios to assess the valuation of ARM and TSM based on earnings, cash flow, sales, and book value. Pay attention to the following notable points where extreme values stand out.
- ARM stands out with a premium P/E of 170.26, while TSM at 19.45 remains within a more conventional earnings multiple.
| Symbol | ARM | TSM |
|---|---|---|
| Price-to-Earnings Ratio (P/E, TTM) | 170.26 | 19.45 |
| Forward PEG Ratio (TTM) | 6.09 | 1.10 |
| Price-to-Sales Ratio (P/S, TTM) | 37.33 | 8.11 |
| Price-to-Book Ratio (P/B, TTM) | 21.38 | 5.54 |
| Price-to-Free Cash Flow Ratio (P/FCF, TTM) | 220.26 | 27.60 |
| EV-to-EBITDA (TTM) | 221.33 | 10.81 |
| EV-to-Sales (TTM) | 36.85 | 7.56 |
| EV-to-Free Cash Flow (TTM) | 217.45 | 25.74 |
Dividend Comparison
ARM offers a 0% dividend yield, suggesting it may be reinvesting available cash back into the business for future growth, while TSM provides a 1.63% dividend yield, giving investors a steady income stream.
| Symbol | ARM | TSM |
|---|---|---|
| Dividend Yield (TTM) | 0.00% | 1.63% |
Financial Strength Metrics Comparison
This section dives into the financial resilience of ARM and TSM, spotlighting key metrics like liquidity, leverage, and debt coverage. Check out the standout observations below where notable differences or extremes pop up.
- ARM shows “--” for interest coverage, hinting at negligible interest costs, whereas TSM (at 280.65) covers its interest obligations.
| Symbol | ARM | TSM |
|---|---|---|
| Current Ratio (TTM) | 4.96 | 2.39 |
| Quick Ratio (TTM) | 4.96 | 2.18 |
| Debt-to-Equity Ratio (TTM) | 0.04 | 0.21 |
| Debt-to-Assets Ratio (TTM) | 0.03 | 0.14 |
| Interest Coverage Ratio (TTM) | -- | 280.65 |