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 2026-05-13.
Caterpillar Inc. · Industrials
$912.14
-47.9% upside to fair value
Grade D
High Quality
VS
Taiwan Semiconductor Manufacturing Company Limited · Technology
$366.24
+45.0% upside to fair value
Grade C
High Quality
QuantHub Verdict
TSM has more upside to fair value
(+45.0%).
TSM trades at a lower forward P/E
(27.2x).
These are model outputs — not personalized investment advice.
See all research →
Valuation & Fundamentals
| Metric |
CAT |
TSM |
| Current Price |
$912.14 |
$366.24 |
| Fair Value Estimate |
$475.00 |
$531.05 |
| Upside to Fair Value |
-47.9%
|
+45.0%
|
| Market Cap |
$420.2B |
$1,899.5B |
| Forward P/E |
44.9x
|
27.2x
|
| EV / EBITDA |
30.0x
|
17.3x
|
| Price / Sales |
5.9x
|
12.8x
|
| Price / FCF |
36.7x
|
51.6x
|
| Revenue Growth YoY |
+22.2%
|
+36.5%
|
| Gross Margin |
32.5%
|
61.9%
|
| Operating Margin |
16.6%
|
53.2%
|
| Return on Equity |
47.5%
|
36.9%
|
| Dividend Yield |
1.5% |
0% |
| FCF Yield |
2.73%
|
1.94%
|
| Analyst Consensus |
Hold
|
Strong Buy
|
Investment Thesis
Caterpillar is the world's leading manufacturer of construction and mining equipment, with diversified revenue across Construction Industries, Resource Industries, Energy & Transportation, and Cat Financial. Q1 2026 results reported April 30 showed revenue of $17.4 billion (+22.2% YoY) and EPS of $5.50 (+30.3% YoY), driven by powerful demand from data center build-outs (large engine and power gen…
Taiwan Semiconductor Manufacturing Company Limited (TSMC) is the world's leading pure-play semiconductor foundry, commanding approximately 60% of the global advanced node foundry market. The company benefits from a durable competitive moat driven by its pioneering foundry model, massive scale, advanced manufacturing capabilities, and strong customer relationships with major technology firms. TSMC…
Accumulation Zones
| Metric |
CAT |
TSM |
| Zone Low |
$356.00 |
$398.29 |
| Zone High |
$404.00 |
$451.39 |
| In Buy Zone? |
No
|
Yes
|