TSM
Taiwan Semiconductor Manufacturing Company Limited
Technology · Semiconductors · Taiwan · Stock
Score Breakdown
Scored for Dividend Income profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- TSMC earned perfect scores in growth, profitability, and financial health, reflecting 25-27% top-and-bottom-line expansion, margins above 40%, and a virtually debt-free balance sheet — a combination that drives a strong 75.2/100 composite.
- The dividend sub-score of 15.0 out of 20 reflects a disciplined 31.4% payout ratio that qualifies TSMC as a Dividend Candidate without sacrificing reinvestment capacity.
- The composite is anchored at 75.2/100 rather than higher primarily because the momentum sub-score (9.0/20) and the theme sub-score (0.0/20) did not contribute at the level the fundamental factors did.
Why Not Higher
- The momentum sub-score of 9.0 out of 20 was the lowest scored factor with available evidence, indicating that recent momentum dynamics tempered what would otherwise be a near-perfect fundamental profile.
- The theme sub-score of 0.0 out of 20 — despite TSMC's direct assignment to AI Infrastructure and Semiconductors — did not contribute positively to the composite under the current model run, representing a structural drag on the total score.
Data Confidence
9 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2023's $70,598,800,000 to FY2024's $88,268,000,000, a gain of 25.0%. Net income rose 27.0% over the same period, from FY2023's $27,793,200,000 to FY2024's $35,301,100,000, while diluted EPS increased 27.1% from FY2023's $1.07 to FY2024's $1.36.
The model rewarded broad-based, double-digit expansion across revenue, net income, and earnings per share in FY2024, reflecting consistent top-line and bottom-line acceleration that merits a perfect growth score.
In FY2024, TSMC reported a net margin of 40.0%, an operating margin of 45.7%, and a return on assets of 17.3%.
The model rewarded these exceptionally high margin and asset-return figures: a 40.0% net margin and 45.7% operating margin indicate that a large share of each revenue dollar flows through to profit, while a 17.3% return on assets demonstrates highly efficient use of the company's asset base.
In FY2024, TSMC carried a debt-to-equity ratio of 0.01 and an interest coverage ratio of 126.0, with total assets of $204,079,400,000.
A near-zero debt-to-equity ratio signals minimal financial leverage, while an interest coverage ratio of 126.0 in FY2024 means operating income dwarfs interest obligations by more than a hundredfold — both indicators of exceptional balance-sheet resilience that the model rewarded with a perfect score.
Filing evidence currently available does not support a more specific explanation for this factor.
In FY2024, TSMC's dividend payout ratio (dividends paid divided by net income) was 31.4%.
A payout ratio of 31.4% in FY2024 indicates that the company returns a meaningful but conservative portion of earnings to shareholders as dividends, retaining the majority for reinvestment — a balance the model rewarded with a solid, though not perfect, dividend score.
TSMC is assigned to the macro themes of AI Infrastructure and Semiconductors.
Although TSMC is directly assigned to two high-profile macro themes — AI Infrastructure and Semiconductors — this assignment did not translate into a positive score under the model's current methodology; the theme sub-score reflects a scoring outcome specific to this model run rather than any absence of thematic relevance.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Taiwan Semiconductor Manufacturing Company delivered exceptional financial performance in FY2024, growing revenue 25.0% to $88,268,000,000 and net income 27.0% to $35,301,100,000, while maintaining a 40.0% net margin and 45.7% operating margin that reflect world-class profitability. The company's balance sheet is fortress-like, with a debt-to-equity ratio of just 0.01 and an interest coverage ratio of 126.0, underscoring minimal financial risk. A dividend payout ratio of 31.4% signals a disciplined capital-return policy that balances shareholder income with reinvestment capacity. The composite score of 75.2/100 with a Low risk rating and a Dividend Candidate label reflects these strengths, tempered by a subdued momentum sub-score and a theme sub-score that did not contribute positively despite TSMC's direct assignment to the AI Infrastructure and Semiconductors themes.
Plain English
TSMC is a highly profitable chip company that grew its revenue and profits by roughly 25-27% in 2024, carries almost no debt, and pays a steady dividend — making it look like a solid, low-risk business, though its stock momentum and the way the model scored its tech-theme relevance held its overall rating below the top tier.
Bull Case vs. Bear Case
Bull Case
- Revenue surged 25.0% year-over-year to $88,268,000,000 in FY2024, accompanied by a 27.0% rise in net income and a 27.1% increase in diluted EPS, demonstrating broad-based, accelerating growth across the income statement.
- With a net margin of 40.0% and an operating margin of 45.7% in FY2024, TSMC converts an unusually large share of each revenue dollar into profit, supported by a 17.3% return on assets that shows highly efficient deployment of its $204,079,400,000 asset base.
- A near-zero debt-to-equity ratio of 0.01 and an interest coverage ratio of 126.0 in FY2024 mean TSMC's operating income dwarfs its interest obligations by more than a hundredfold, providing exceptional balance-sheet resilience and financial flexibility.
Bear Case
- The momentum sub-score of 9.0 out of 20 was the weakest scored factor, suggesting that recent price or earnings momentum has not kept pace with the company's strong fundamental profile.
- Despite being directly assigned to the high-profile AI Infrastructure and Semiconductors macro themes, the theme sub-score contributed zero to the composite, indicating that thematic assignment alone does not guarantee a positive scoring outcome under the current model methodology.
- A dividend payout ratio of 31.4% in FY2024, while healthy, means the majority of earnings are retained rather than returned to shareholders, which may limit near-term income appeal for dividend-focused investors.
What Could Change the Picture
Bullish Triggers
- A meaningful improvement in the momentum sub-score — reflecting stronger recent performance trends — could lift the composite score and reinforce the already-exceptional fundamental picture built on 25-27% growth rates and 40%+ margins.
- If the model's theme scoring methodology were updated to reward TSMC's direct assignment to AI Infrastructure and Semiconductors, the currently zero-contributing theme factor could become a meaningful positive, given the company's central role in both sectors.
Bearish Triggers
- A sustained deceleration in revenue or net income growth from the 25-27% rates achieved in FY2024 would challenge the perfect growth score that anchors much of the current composite rating.
- Any significant increase in leverage from the current near-zero debt-to-equity ratio of 0.01, or a deterioration in the 126.0 interest coverage ratio, would undermine the financial health pillar that currently scores perfectly.
Risk Profile
Low RiskTSMC carries a Low risk rating consistent with its FY2024 debt-to-equity ratio of just 0.01 and an interest coverage ratio of 126.0, meaning the company's operating income exceeds its interest obligations by more than a hundredfold and its balance sheet carries virtually no financial leverage. The one area of uncertainty is the momentum sub-score of 9.0 out of 20, for which detailed filing evidence was not available to provide a more specific explanation.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.