The stock market can be unpredictable, volatile, and sometimes totally nonsensical. Taiwan Semiconductor has a goal that's truly global in scope and import: alleviate the chip shortage, and bring the world a little bit closer to normal again. So there's no need to let borders be barriers in your tech-focused portfolio. It's a low-beta stock that pays a dividend and is breaking out to the upside. If you're open to it, TSM stock is as good a place to start as any. Some of you reading this might never have considered investing in foreign companies before. If Taiwan Semiconductor's production increase makes the company an industry front-runner however, then the $40+ billion investment could yield remarkable returns. There is a risk here, as Taiwan Semiconductor's management may be overconfident in the company's ability to alleviate the semiconductor deficit. This could have a major positive impact on chip-challenged manufacturers of smartphones, game consoles, automobiles and a range of other tech-enabled products. Thus, Taiwan Semiconductor is effectively doubling down on its production capacity. A year earlier, Taiwan Semiconductor's planned capital expenditure budget was $22 billion. The company dropped a real bombshell with that statement. But there's another announcement that could have implications for the company, as well as for the broader microprocessor market.Īccording the Taiwan Semiconductor, the company's management expects "the 2022 capital budget to be between US$40 billion and US$44 billion." Taiwan Semiconductor's fiscal data and outlook pleased Wall Street and boosted TSM stock.
That's impressive - but could there be even more positive news to report? Dropping a Bombshell
As White observed, Taiwan Semiconductor's outlook for 2022's first quarter is also a highlight of the company's earnings report.Īpparently, the chipmaker expects to generate $16.6 billion to $17.2 billion in revenue, while achieving gross profit margin between 53% and 55%. Over the same time frame, the company's net income and diluted earnings per share both grew 16.4%. Who could blame them, really? During 2021's fourth quarter, Taiwan Semiconductor increased its revenue by 21.2%. To steal a phrase from fellow InvestorPlace contributor William White, financial traders are feeling pretty chipper about chipmaker Taiwan Semiconductor. In other words, the stock moves about as fast as the S&P 500, so it's a low-volatility asset that's appropriate for most portfolios. That's not unreasonably high, so value-focused investors can still buy the shares with a clear conscience.Īdditionally, TSM stock has a five-year monthly beta of 1.02. It just goes to show that "time in the markets" can be a better strategy than "timing the markets." You never know when the big breakout might happen.īy the way, even after the share-price increase, Taiwan Semiconductor's trailing 12-month price-to-earnings ratio is 35.17. In mid-January however, patient investors were finally rewarded as TSM stock leaped to $140.
Currently, the company pays a forward annual dividend yield of 1.39%. Actually, that's not entirely true because Taiwan Semiconductor does pay dividends, which has boosted long-term shareholder returns.
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