196.63 USD
+0.04 (+0.02%)
213.05 USD
+16.42 (+8.35%)
We assign a fundamental rating of 6 out of 10 to TXN. TXN was compared to 113 industry peers in the Semiconductors & Semiconductor Equipment industry. While TXN belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. TXN is valied quite expensively at the moment, while it does show a decent growth rate. Finally TXN also has an excellent dividend rating. This makes TXN very considerable for dividend investing!
1. Profitability
1.1 Basic Checks
- In the past year TXN was profitable.
- TXN had a positive operating cash flow in the past year.
- In the past 5 years TXN has always been profitable.
- In the past 5 years TXN always reported a positive cash flow from operatings.
1.2 Ratios
- The Return On Assets of TXN (14.33%) is better than 88.50% of its industry peers.
- Looking at the Return On Equity, with a value of 30.17%, TXN belongs to the top of the industry, outperforming 92.04% of the companies in the same industry.
- TXN has a better Return On Invested Capital (16.57%) than 91.15% of its industry peers.
- TXN had an Average Return On Invested Capital over the past 3 years of 24.88%. This is significantly above the industry average of 10.78%.
- The 3 year average ROIC (24.88%) for TXN is well above the current ROIC(16.57%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.33% | ||
| ROE | 30.17% | ||
| ROIC | 16.57% |
ROA(3y)21.83%
ROA(5y)25.12%
ROE(3y)42.11%
ROE(5y)48.99%
ROIC(3y)24.88%
ROIC(5y)28.23%
1.3 Margins
- The Profit Margin of TXN (29.05%) is better than 88.50% of its industry peers.
- In the last couple of years the Profit Margin of TXN has declined.
- TXN's Operating Margin of 34.82% is amongst the best of the industry. TXN outperforms 92.92% of its industry peers.
- TXN's Operating Margin has declined in the last couple of years.
- TXN's Gross Margin of 57.48% is amongst the best of the industry. TXN outperforms 81.42% of its industry peers.
- TXN's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 34.82% | ||
| PM (TTM) | 29.05% | ||
| GM | 57.48% |
OM growth 3Y-11.42%
OM growth 5Y-2.89%
PM growth 3Y-10.21%
PM growth 5Y-2.51%
GM growth 3Y-4.84%
GM growth 5Y-1.81%
2. Health
2.1 Basic Checks
- TXN has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
- The number of shares outstanding for TXN has been increased compared to 1 year ago.
- Compared to 5 years ago, TXN has less shares outstanding
- TXN has a worse debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 9.36 indicates that TXN is not in any danger for bankruptcy at the moment.
- TXN has a Altman-Z score of 9.36. This is in the better half of the industry: TXN outperforms 69.03% of its industry peers.
- The Debt to FCF ratio of TXN is 6.75, which is on the high side as it means it would take TXN, 6.75 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of TXN (6.75) is comparable to the rest of the industry.
- TXN has a Debt/Equity ratio of 0.81. This is a neutral value indicating TXN is somewhat dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.81, TXN is doing worse than 81.42% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.81 | ||
| Debt/FCF | 6.75 | ||
| Altman-Z | 9.36 |
ROIC/WACC1.53
WACC10.8%
2.3 Liquidity
- TXN has a Current Ratio of 4.45. This indicates that TXN is financially healthy and has no problem in meeting its short term obligations.
- TXN's Current ratio of 4.45 is fine compared to the rest of the industry. TXN outperforms 66.37% of its industry peers.
- A Quick Ratio of 2.90 indicates that TXN has no problem at all paying its short term obligations.
- Looking at the Quick ratio, with a value of 2.90, TXN is in the better half of the industry, outperforming 61.95% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.45 | ||
| Quick Ratio | 2.9 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 1.67% over the past year.
- TXN shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.90%.
- Measured over the past years, TXN shows a small growth in Revenue. The Revenue has been growing by 1.69% on average per year.
EPS 1Y (TTM)1.67%
EPS 3Y-14.28%
EPS 5Y0%
EPS Q2Q%0.68%
Revenue 1Y (TTM)9.9%
Revenue growth 3Y-5.17%
Revenue growth 5Y1.69%
Sales Q2Q%14.24%
3.2 Future
- Based on estimates for the next years, TXN will show a quite strong growth in Earnings Per Share. The EPS will grow by 17.13% on average per year.
- TXN is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.26% yearly.
EPS Next Y6.65%
EPS Next 2Y9.25%
EPS Next 3Y13.5%
EPS Next 5Y17.13%
Revenue Next Year14.11%
Revenue Next 2Y11.14%
Revenue Next 3Y10.98%
Revenue Next 5Y10.26%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 35.95, the valuation of TXN can be described as expensive.
- Based on the Price/Earnings ratio, TXN is valued a bit cheaper than 76.11% of the companies in the same industry.
- TXN's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 28.87.
- Based on the Price/Forward Earnings ratio of 31.74, the valuation of TXN can be described as expensive.
- 67.26% of the companies in the same industry are more expensive than TXN, based on the Price/Forward Earnings ratio.
- TXN is valuated rather expensively when we compare the Price/Forward Earnings ratio to 25.96, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.95 | ||
| Fwd PE | 31.74 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, TXN is valued a bit cheaper than the industry average as 72.57% of the companies are valued more expensively.
- The rest of the industry has a similar Price/Free Cash Flow ratio as TXN.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 85.9 | ||
| EV/EBITDA | 23.53 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates TXN does not grow enough to justify the current Price/Earnings ratio.
- The excellent profitability rating of TXN may justify a higher PE ratio.
- TXN's earnings are expected to grow with 13.50% in the coming years. This may justify a more expensive valuation.
PEG (NY)5.41
PEG (5Y)N/A
EPS Next 2Y9.25%
EPS Next 3Y13.5%
5. Dividend
5.1 Amount
- TXN has a Yearly Dividend Yield of 2.91%.
- TXN's Dividend Yield is rather good when compared to the industry average which is at 0.49. TXN pays more dividend than 95.58% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, TXN pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.91% |
5.2 History
- On average, the dividend of TXN grows each year by 10.46%, which is quite nice.
- TXN has been paying a dividend for at least 10 years, so it has a reliable track record.
- TXN has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)10.46%
Div Incr Years21
Div Non Decr Years26
5.3 Sustainability
- 98.66% of the earnings are spent on dividend by TXN. This is not a sustainable payout ratio.
- TXN's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP98.66%
EPS Next 2Y9.25%
EPS Next 3Y13.5%
TEXAS INSTRUMENTS INC / TXN FAQ
What is the ChartMill fundamental rating of TEXAS INSTRUMENTS INC (TXN) stock?
ChartMill assigns a fundamental rating of 6 / 10 to TXN.
What is the valuation status of TEXAS INSTRUMENTS INC (TXN) stock?
ChartMill assigns a valuation rating of 3 / 10 to TEXAS INSTRUMENTS INC (TXN). This can be considered as Overvalued.
How profitable is TEXAS INSTRUMENTS INC (TXN) stock?
TEXAS INSTRUMENTS INC (TXN) has a profitability rating of 8 / 10.
What is the expected EPS growth for TEXAS INSTRUMENTS INC (TXN) stock?
The Earnings per Share (EPS) of TEXAS INSTRUMENTS INC (TXN) is expected to grow by 6.65% in the next year.
Can you provide the dividend sustainability for TXN stock?
The dividend rating of TEXAS INSTRUMENTS INC (TXN) is 7 / 10 and the dividend payout ratio is 98.66%.