Which is better M20 or M50? Every single time I use the "Ask a question" feature on @e30worldwide I get asked "which is a better in an e30? M50 or M20?"
I believe this is all up to what you want from your car. Each person has a different goals and tastes. What's the reason of swapping out the M20 for an M50? Is it for more power? You just want to upgrade? there has to be a validated reason for you to do so. If the reason is "you just want to", that's a valid enough reason.
But if we were to compare them realistically, whats the advantage of swapping out the M20? If you want to swap it out with an M50 and leave the M50 stock then you are just wasting money. The money you are paying to the swap for that small increase in horsepower is not worth. The M20 is approx 170 HP vs the M50's 189 HP.
Spend your money on some headers, cams, intake. Cheaper, easier and the power different is not that big from experience.
If you do want to swap your e30...S54 is the right choices... :)