Starbucks and Taiwan Semiconductor Manufacturing Company are both leaders in their respective fields. Starbucks is the market leader for specialty coffee shops and TSMC is the world’s largest dedicated semiconductor foundry. Both companies are strong today and are projected to have steady growth for the foreseeable future. This makes them healthy medium to long-term investments. These two companies operate in completely different markets and therefore the actions of either company do not affect the other. This makes them suitable for this memo because there is no conflict of interest when comparing the two.
Criteria for Analysis of Starbucks and TSMC:
Brief Description: Starbucks operates mostly in North America with 69% of revenues coming …show more content…
Zack’s Investment Research (2017), claims that 14/20 analysts rate the stock as a ‘strong buy.’ According to Guru Stocks, they are predicted to earn a 5.58% return on your investment. Starbuck’s gross margin was 60% and their profit margin was 13% and their after-tax return on earnings was 48% for 2016. The gross margins have been steady for four years, profit margins have been steady for three years and their after-tax ROE has been holding steady for the past two years (“SBUX Company Financials”, 2017). While these have not necessarily grown, their raw profits and ROE have gone up. Overall the stock has shown growth over a long period of time, and as such, it is recommended to be a medium to long-term investment, as you will only make a small amount of money by investing in the short …show more content…
They also predict that investing in the stock now will give a 5.5% return on your investment. TSMC’s gross margin was 50%, their profit margin was 35%, and their after-tax return on earnings was 24%. Their gross margin has been holding steady for the past four years, their profit margin has been trending upwards for the past four years, and their after-tax ROE has also been holding steady for the past four years (“Taiwan Semiconductor Manufacturing Company Ltd. Quote & Summary Data”, 2017). Something important to note is that their profitability has been increasing steadily, and it is still projected to increase. Something else to note is that their stock is now set to surpass its all-time high of $41.50 that was set on Oct. 18th of this year. However, Zack’s Investment Research (2017) claims that most investors recommend that you hold the stock as it is still trending upwards for the foreseeable
Criteria for Analysis of Starbucks and TSMC:
Brief Description: Starbucks operates mostly in North America with 69% of revenues coming …show more content…
Zack’s Investment Research (2017), claims that 14/20 analysts rate the stock as a ‘strong buy.’ According to Guru Stocks, they are predicted to earn a 5.58% return on your investment. Starbuck’s gross margin was 60% and their profit margin was 13% and their after-tax return on earnings was 48% for 2016. The gross margins have been steady for four years, profit margins have been steady for three years and their after-tax ROE has been holding steady for the past two years (“SBUX Company Financials”, 2017). While these have not necessarily grown, their raw profits and ROE have gone up. Overall the stock has shown growth over a long period of time, and as such, it is recommended to be a medium to long-term investment, as you will only make a small amount of money by investing in the short …show more content…
They also predict that investing in the stock now will give a 5.5% return on your investment. TSMC’s gross margin was 50%, their profit margin was 35%, and their after-tax return on earnings was 24%. Their gross margin has been holding steady for the past four years, their profit margin has been trending upwards for the past four years, and their after-tax ROE has also been holding steady for the past four years (“Taiwan Semiconductor Manufacturing Company Ltd. Quote & Summary Data”, 2017). Something important to note is that their profitability has been increasing steadily, and it is still projected to increase. Something else to note is that their stock is now set to surpass its all-time high of $41.50 that was set on Oct. 18th of this year. However, Zack’s Investment Research (2017) claims that most investors recommend that you hold the stock as it is still trending upwards for the foreseeable