CAT vs TSM: Which Is the Better Buy?
Side-by-side comparison of Caterpillar Inc. and Taiwan Semiconductor Manufacturing Company Limited — fair value, conviction, valuation metrics, and QuantHub research signals.
Updated 2026-09-23.
Caterpillar Inc. · Industrials
$808.99
-2.2% upside to fair value
Med Conviction
Grade C
High Quality
VS
Taiwan Semiconductor Manufacturing Company Limited · Technology
$452.00
+13.9% upside to fair value
Med Conviction
Grade B
High Quality
QuantHub Verdict
TSM has more upside to fair value
(+13.9%).
These are model outputs — not personalized investment advice.
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Valuation & Fundamentals
| Metric |
CAT |
TSM |
| Current Price |
$808.99 |
$452.00 |
| Fair Value Estimate |
$790.88 |
$515.00 |
| Upside to Fair Value |
-2.2%
|
+13.9%
|
| Market Cap |
$372.6B |
$2,344.3B |
| Forward P/E |
—
|
—
|
| EV / EBITDA |
23.6x
|
19.2x
|
| Price / Sales |
5.0x
|
0.5x
|
| Price / FCF |
41.4x
|
2.1x
|
| Revenue Growth YoY |
+24.0%
|
+36.0%
|
| Gross Margin |
33.9%
|
64.2%
|
| Operating Margin |
17.5%
|
56.0%
|
| Return on Equity |
54.1%
|
39.3%
|
| Dividend Yield |
0.76% |
0.96% |
| FCF Yield |
2.41%
|
47.62%
|
| Analyst Consensus |
Buy
|
Buy
|
Investment Thesis
Caterpillar is the world's premier manufacturer of heavy construction and mining equipment, diesel and natural gas power units, and industrial gas turbines, organized across Construction Industries, Resource Industries, Energy & Transportation, and Financial Products, with 118,000 employees and a century-old brand. Business quality is high: return on equity of 54.1%, TTM operating margin of 17.5%…
Taiwan Semiconductor Manufacturing Company is the world's largest contract chipmaker, manufacturing advanced logic, mixed-signal, RF, and embedded memory wafers for high-performance computing, smartphones, IoT, and automotive customers from a base of 65,152 employees headquartered in Hsinchu, Taiwan. The business quality is exceptionally high: TTM gross margin is 64.2%, TTM operating margin is 56…
Accumulation Zones
| Metric |
CAT |
TSM |
| Zone Low |
$593.16 |
$386.25 |
| Zone High |
$672.25 |
$437.75 |
| In Buy Zone? |
No
|
No
|