TEXAS INSTRUMENTS INC (TXN) Stock Fundamental Analysis
USA - NASDAQ:TXN - US8825081040 - Common Stock
169.13 USD
-3.06 (-1.78%)
169.29 USD
+0.16 (+0.09%)
We assign a fundamental rating of 6 out of 10 to TXN. TXN was compared to 112 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 has a decent growth rate and is not valued too expensively. 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.
Each year in the past 5 years TXN has been profitable.
In the past 5 years TXN always reported a positive cash flow from operatings.
1.2 Ratios
TXN has a better Return On Assets (14.33%) than 87.50% of its industry peers.
TXN has a better Return On Equity (30.17%) than 91.07% of its industry peers.
TXN's Return On Invested Capital of 16.57% is amongst the best of the industry. TXN outperforms 91.07% 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 11.03%.
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 89.29% of its industry peers.
TXN's Profit Margin has declined in the last couple of years.
TXN has a better Operating Margin (34.82%) than 92.86% of its industry peers.
In the last couple of years the Operating Margin of TXN has declined.
The Gross Margin of TXN (57.48%) is better than 82.14% of its industry peers.
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), TXN is creating value.
Compared to 1 year ago, TXN has more shares outstanding
TXN has less shares outstanding than it did 5 years ago.
TXN has a worse debt/assets ratio than last year.
2.2 Solvency
TXN has an Altman-Z score of 8.63. This indicates that TXN is financially healthy and has little risk of bankruptcy at the moment.
TXN has a Altman-Z score of 8.63. This is in the better half of the industry: TXN outperforms 68.75% 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 (6.75) which is in line with 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.
With a Debt to Equity ratio value of 0.81, TXN is not doing good in the industry: 81.25% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.81 | ||
| Debt/FCF | 6.75 | ||
| Altman-Z | 8.63 |
ROIC/WACC1.44
WACC11.47%
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 66.96% 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 61.61% 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.
The Revenue has grown by 9.90% in the past year. This is quite good.
The Revenue has been growing slightly by 1.69% on average over the past years.
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 16.92% on average per year.
The Revenue is expected to grow by 10.29% on average over the next years. This is quite good.
EPS Next Y8.86%
EPS Next 2Y13.6%
EPS Next 3Y15.48%
EPS Next 5Y16.92%
Revenue Next Year13.8%
Revenue Next 2Y11.91%
Revenue Next 3Y11.16%
Revenue Next 5Y10.29%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue 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
The Price/Earnings ratio is 30.92, which means the current valuation is very expensive for TXN.
Based on the Price/Earnings ratio, TXN is valued a bit cheaper than the industry average as 74.11% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 26.91, TXN is valued at the same level.
The Price/Forward Earnings ratio is 25.25, which means the current valuation is very expensive for TXN.
67.86% of the companies in the same industry are more expensive than TXN, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 22.92. TXN is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.92 | ||
| Fwd PE | 25.25 |
4.2 Price Multiples
TXN's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. TXN is cheaper than 71.43% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as TXN.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 73.92 | ||
| EV/EBITDA | 20.73 |
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.
TXN's earnings are expected to grow with 15.48% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.49
PEG (5Y)N/A
EPS Next 2Y13.6%
EPS Next 3Y15.48%
5. Dividend
5.1 Amount
TXN has a Yearly Dividend Yield of 3.30%. Purely for dividend investing, there may be better candidates out there.
TXN's Dividend Yield is rather good when compared to the industry average which is at 2.18. TXN pays more dividend than 94.64% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.32, TXN pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.3% |
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 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.
TXN's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP98.66%
EPS Next 2Y13.6%
EPS Next 3Y15.48%
169.13
-3.06 (-1.78%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners91.03%
Inst Owner Change-0.14%
Ins Owners0.22%
Ins Owner Change-0.01%
Market Cap153.76B
Revenue(TTM)17.27B
Net Income(TTM)5.02B
Analysts68.18
Price Target204.63 (20.99%)
Short Float %2.04%
Short Ratio2.52
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.3% |
Yearly Dividend5.27
Dividend Growth(5Y)10.46%
DP98.66%
Div Incr Years21
Div Non Decr Years26
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.76%
Min EPS beat(2)-1.62%
Max EPS beat(2)3.14%
EPS beat(4)3
Avg EPS beat(4)6.78%
Min EPS beat(4)-1.62%
Max EPS beat(4)18.72%
EPS beat(8)7
Avg EPS beat(8)6.02%
EPS beat(12)11
Avg EPS beat(12)5.31%
EPS beat(16)15
Avg EPS beat(16)6.38%
Revenue beat(2)2
Avg Revenue beat(2)1.12%
Min Revenue beat(2)1.09%
Max Revenue beat(2)1.15%
Revenue beat(4)4
Avg Revenue beat(4)1.91%
Min Revenue beat(4)1.09%
Max Revenue beat(4)3.01%
Revenue beat(8)5
Avg Revenue beat(8)0.6%
Revenue beat(12)7
Avg Revenue beat(12)0.4%
Revenue beat(16)11
Avg Revenue beat(16)1.75%
PT rev (1m)0%
PT rev (3m)4.43%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.06%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)0.79%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.78%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)1.59%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.92 | ||
| Fwd PE | 25.25 | ||
| P/S | 8.91 | ||
| P/FCF | 73.92 | ||
| P/OCF | 22.29 | ||
| P/B | 9.25 | ||
| P/tB | 12.78 | ||
| EV/EBITDA | 20.73 |
EPS(TTM)5.47
EY3.23%
EPS(NY)6.7
Fwd EY3.96%
FCF(TTM)2.29
FCFY1.35%
OCF(TTM)7.59
OCFY4.49%
SpS18.99
BVpS18.29
TBVpS13.23
PEG (NY)3.49
PEG (5Y)N/A
Graham Number47.44
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.33% | ||
| ROE | 30.17% | ||
| ROCE | 18.85% | ||
| ROIC | 16.57% | ||
| ROICexc | 19.79% | ||
| ROICexgc | 23.91% | ||
| OM | 34.82% | ||
| PM (TTM) | 29.05% | ||
| GM | 57.48% | ||
| FCFM | 12.05% |
ROA(3y)21.83%
ROA(5y)25.12%
ROE(3y)42.11%
ROE(5y)48.99%
ROIC(3y)24.88%
ROIC(5y)28.23%
ROICexc(3y)37.04%
ROICexc(5y)45.04%
ROICexgc(3y)50.11%
ROICexgc(5y)68.14%
ROCE(3y)28.31%
ROCE(5y)32.12%
ROICexgc growth 3Y-37.97%
ROICexgc growth 5Y-22.81%
ROICexc growth 3Y-32.93%
ROICexc growth 5Y-16.48%
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%
F-Score7
Asset Turnover0.49
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.81 | ||
| Debt/FCF | 6.75 | ||
| Debt/EBITDA | 1.72 | ||
| Cap/Depr | 256.63% | ||
| Cap/Sales | 27.9% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 87.43% | ||
| Profit Quality | 41.47% | ||
| Current Ratio | 4.45 | ||
| Quick Ratio | 2.9 | ||
| Altman-Z | 8.63 |
F-Score7
WACC11.47%
ROIC/WACC1.44
Cap/Depr(3y)333.46%
Cap/Depr(5y)264.77%
Cap/Sales(3y)24.58%
Cap/Sales(5y)18.33%
Profit Quality(3y)40.07%
Profit Quality(5y)60.03%
High Growth Momentum
Growth
EPS 1Y (TTM)1.67%
EPS 3Y-14.28%
EPS 5Y0%
EPS Q2Q%0.68%
EPS Next Y8.86%
EPS Next 2Y13.6%
EPS Next 3Y15.48%
EPS Next 5Y16.92%
Revenue 1Y (TTM)9.9%
Revenue growth 3Y-5.17%
Revenue growth 5Y1.69%
Sales Q2Q%14.24%
Revenue Next Year13.8%
Revenue Next 2Y11.91%
Revenue Next 3Y11.16%
Revenue Next 5Y10.29%
EBIT growth 1Y9.37%
EBIT growth 3Y-16.01%
EBIT growth 5Y-1.25%
EBIT Next Year50.61%
EBIT Next 3Y27.29%
EBIT Next 5Y22.04%
FCF growth 1Y26.21%
FCF growth 3Y-38.03%
FCF growth 5Y-23.72%
OCF growth 1Y5.49%
OCF growth 3Y-10.31%
OCF growth 5Y-1.02%
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.
Can you provide the valuation status for TEXAS INSTRUMENTS INC?
ChartMill assigns a valuation rating of 4 / 10 to TEXAS INSTRUMENTS INC (TXN). This can be considered as Fairly Valued.
How profitable is TEXAS INSTRUMENTS INC (TXN) stock?
TEXAS INSTRUMENTS INC (TXN) has a profitability rating of 8 / 10.
How financially healthy is TEXAS INSTRUMENTS INC?
The financial health rating of TEXAS INSTRUMENTS INC (TXN) is 6 / 10.
What is the earnings growth outlook for TEXAS INSTRUMENTS INC?
The Earnings per Share (EPS) of TEXAS INSTRUMENTS INC (TXN) is expected to grow by 8.86% in the next year.