196.63 USD
+0.04 (+0.02%)
212.43 USD
+15.8 (+8.04%)
TXN gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 113 industry peers in the Semiconductors & Semiconductor Equipment industry. TXN has an excellent profitability rating, but there are some minor concerns on its financial health. TXN has a expensive valuation and it also scores bad on growth. Finally TXN also has an excellent dividend rating. These ratings would make TXN suitable for dividend investing!
1. Profitability
1.1 Basic Checks
- TXN had positive earnings in the past year.
- TXN had a positive operating cash flow in the past year.
- TXN had positive earnings in 4 of the past 5 years.
- Of the past 5 years TXN 4 years had a positive operating cash flow.
1.2 Ratios
- The Return On Assets of TXN (14.33%) is better than 88.50% of its industry peers.
- TXN has a better Return On Equity (30.17%) than 92.04% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 16.57%, TXN belongs to the top of the industry, outperforming 91.15% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for TXN is significantly above the industry average of 10.78%.
- The last Return On Invested Capital (16.57%) for TXN is well below the 3 year average (24.88%), which needs to be investigated, but indicates that TXN had better years and this may not be a problem.
| 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
- TXN's Profit Margin of 29.05% is amongst the best of the industry. TXN outperforms 88.50% of its industry peers.
- In the last couple of years the Profit Margin of TXN has declined.
- With an excellent Operating Margin value of 34.82%, TXN belongs to the best of the industry, outperforming 92.92% of the companies in the same industry.
- TXN's Operating Margin has declined in the last couple of years.
- With an excellent Gross Margin value of 57.48%, TXN belongs to the best of the industry, outperforming 81.42% of the companies in the same industry.
- In the last couple of years the Gross Margin of TXN has declined.
| 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.
- TXN has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
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 better Altman-Z score (9.36) than 69.03% of its industry peers.
- TXN has a debt to FCF ratio of 6.75. This is a slightly negative value and a sign of low solvency as TXN would need 6.75 years to pay back of all of its debts.
- TXN has a Debt to FCF ratio of 6.75. This is comparable to the rest of the industry: TXN outperforms 53.98% of its industry peers.
- TXN has a Debt/Equity ratio of 0.81. This is a neutral value indicating TXN is somewhat dependend on debt financing.
- The Debt to Equity ratio of TXN (0.81) is worse than 81.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.81 | ||
| Debt/FCF | 6.75 | ||
| Altman-Z | 9.36 |
ROIC/WACC1.54
WACC10.79%
2.3 Liquidity
- A Current Ratio of 4.45 indicates that TXN has no problem at all paying its short term obligations.
- TXN has a Current ratio of 4.45. This is in the better half of the industry: TXN outperforms 66.37% of its industry peers.
- TXN has a Quick Ratio of 2.90. This indicates that TXN is financially healthy and has no problem in meeting its short term obligations.
- TXN has a Quick ratio of 2.90. This is in the better half of the industry: TXN outperforms 61.95% of its industry peers.
| 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 4.82% over the past year.
- TXN shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -1.31% yearly.
EPS 1Y (TTM)4.82%
EPS 3Y-16.61%
EPS 5Y-1.31%
EPS Q2Q%-2.31%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%10.38%
3.2 Future
- The Earnings Per Share is expected to grow by 19.54% on average over the next years. This is quite good.
- The Revenue is expected to grow by 7.83% on average over the next years.
EPS Next Y13.87%
EPS Next 2Y18.11%
EPS Next 3Y18.15%
EPS Next 5Y19.54%
Revenue Next Year8.26%
Revenue Next 2Y9.46%
Revenue Next 3Y9.35%
Revenue Next 5Y7.83%
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.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 36.15, the valuation of TXN can be described as expensive.
- Based on the Price/Earnings ratio, TXN is valued a bit cheaper than 77.88% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 28.82. TXN is valued slightly more expensive when compared to this.
- With a Price/Forward Earnings ratio of 31.74, TXN can be considered very expensive at the moment.
- Based on the Price/Forward Earnings ratio, TXN is valued a bit cheaper than the industry average as 68.14% of the companies are valued more expensively.
- TXN is valuated rather expensively when we compare the Price/Forward Earnings ratio to 25.95, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.15 | ||
| Fwd PE | 31.74 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TXN indicates a somewhat cheap valuation: TXN is cheaper than 72.57% of the companies listed in the same industry.
- TXN's Price/Free Cash Flow ratio is in line with the industry average.
| 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.
- TXN has an outstanding profitability rating, which may justify a higher PE ratio.
- A more expensive valuation may be justified as TXN's earnings are expected to grow with 18.15% in the coming years.
PEG (NY)2.61
PEG (5Y)N/A
EPS Next 2Y18.11%
EPS Next 3Y18.15%
5. Dividend
5.1 Amount
- TXN has a Yearly Dividend Yield of 2.89%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 0.49, TXN pays a better dividend. On top of this TXN pays more dividend than 95.58% of the companies listed 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 | 2.89% |
5.2 History
- The dividend of TXN is nicely growing with an annual growth rate of 10.46%!
- TXN has been paying a dividend for at least 10 years, so it has a reliable track record.
- TXN has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)10.46%
Div Incr Years21
Div Non Decr Years26
5.3 Sustainability
- TXN pays out 98.66% of its income as dividend. This is not a sustainable payout ratio.
- The dividend of TXN is growing, but earnings are growing more, so the dividend growth is sustainable.
DP98.66%
EPS Next 2Y18.11%
EPS Next 3Y18.15%
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 13.87% 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%.