TEXAS INSTRUMENTS INC (TXN) Stock Fundamental Analysis
NASDAQ:TXN - Nasdaq - US8825081040 - Common Stock
Taking everything into account, TXN scores 6 out of 10 in our fundamental rating. TXN was compared to 109 industry peers in the Semiconductors & Semiconductor Equipment industry. While TXN has a great profitability rating, there are some minor concerns on its financial health. While showing a medium growth rate, TXN is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
TXN had positive earnings in the past year.
In the past year TXN had a positive cash flow from operations.
TXN had positive earnings in each of the past 5 years.
Each year in the past 5 years TXN had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 13.99%, TXN belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
With an excellent Return On Equity value of 28.61%, TXN belongs to the best of the industry, outperforming 89.81% of the companies in the same industry.
TXN's Return On Invested Capital of 15.20% is amongst the best of the industry. TXN outperforms 87.96% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TXN is significantly above the industry average of 11.96%.
The last Return On Invested Capital (15.20%) for TXN is well below the 3 year average (31.77%), which needs to be investigated, but indicates that TXN had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.99% | ||
| ROE | 28.61% | ||
| ROIC | 15.2% |
ROA(3y)27.8%
ROA(5y)27.97%
ROE(3y)52.04%
ROE(5y)54.54%
ROIC(3y)31.77%
ROIC(5y)31.43%
1.3 Margins
With an excellent Profit Margin value of 31.44%, TXN belongs to the best of the industry, outperforming 92.59% of the companies in the same industry.
TXN's Profit Margin has been stable in the last couple of years.
The Operating Margin of TXN (34.99%) is better than 95.37% of its industry peers.
In the last couple of years the Operating Margin of TXN has remained more or less at the same level.
With an excellent Gross Margin value of 58.63%, TXN belongs to the best of the industry, outperforming 82.41% of the companies in the same industry.
TXN's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 34.99% | ||
| PM (TTM) | 31.44% | ||
| GM | 58.63% |
OM growth 3Y0.75%
OM growth 5Y-0.33%
PM growth 3Y-1.34%
PM growth 5Y1.05%
GM growth 3Y-0.63%
GM growth 5Y-0.69%
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.
Compared to 1 year ago, TXN has more shares outstanding
The number of shares outstanding for TXN has been reduced compared to 5 years ago.
Compared to 1 year ago, TXN has a worse debt to assets ratio.
2.2 Solvency
TXN has an Altman-Z score of 9.28. This indicates that TXN is financially healthy and has little risk of bankruptcy at the moment.
TXN has a Altman-Z score of 9.28. This is in the better half of the industry: TXN outperforms 73.15% of its industry peers.
TXN has a debt to FCF ratio of 9.46. This is a negative value and a sign of low solvency as TXN would need 9.46 years to pay back of all of its debts.
TXN has a Debt to FCF ratio (9.46) which is in line with its industry peers.
A Debt/Equity ratio of 0.74 indicates that TXN is somewhat dependend on debt financing.
TXN has a worse Debt to Equity ratio (0.74) than 81.48% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.74 | ||
| Debt/FCF | 9.46 | ||
| Altman-Z | 9.28 |
ROIC/WACC1.04
WACC14.58%
2.3 Liquidity
A Current Ratio of 4.31 indicates that TXN has no problem at all paying its short term obligations.
TXN has a better Current ratio (4.31) than 68.52% of its industry peers.
A Quick Ratio of 3.14 indicates that TXN has no problem at all paying its short term obligations.
With a decent Quick ratio value of 3.14, TXN is doing good in the industry, outperforming 62.96% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.31 | ||
| Quick Ratio | 3.14 |
3. Growth
3.1 Past
The earnings per share for TXN have decreased strongly by -30.13% in the last year.
The Earnings Per Share has been growing slightly by 4.74% on average over the past years.
The Revenue for TXN has decreased by -13.26% in the past year. This is quite bad
TXN shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.11% yearly.
EPS 1Y (TTM)-30.13%
EPS 3Y6.71%
EPS 5Y4.74%
EPS Q2Q%-20.54%
Revenue 1Y (TTM)-13.26%
Revenue growth 3Y6.6%
Revenue growth 5Y2.11%
Sales Q2Q%-8.41%
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 11.45% on average per year.
The Revenue is expected to grow by 6.85% on average over the next years.
EPS Next Y-27.1%
EPS Next 2Y-8.45%
EPS Next 3Y2.31%
EPS Next 5Y11.45%
Revenue Next Year-11.71%
Revenue Next 2Y-1.12%
Revenue Next 3Y3.74%
Revenue Next 5Y6.85%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
A Price/Earnings ratio of 36.29 indicates a quite expensive valuation of TXN.
Compared to the rest of the industry, the Price/Earnings ratio of TXN indicates a somewhat cheap valuation: TXN is cheaper than 64.81% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of TXN to the average of the S&P500 Index (28.29), we can say TXN is valued slightly more expensively.
The Price/Forward Earnings ratio is 32.99, which means the current valuation is very expensive for TXN.
The rest of the industry has a similar Price/Forward Earnings ratio as TXN.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.44, TXN is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.29 | ||
| Fwd PE | 32.99 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TXN is valued a bit cheaper than 67.59% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TXN is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 121.32 | ||
| EV/EBITDA | 25 |
4.3 Compensation for Growth
TXN has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)7.65
EPS Next 2Y-8.45%
EPS Next 3Y2.31%
5. Dividend
5.1 Amount
TXN has a Yearly Dividend Yield of 2.90%. 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 2.28. TXN pays more dividend than 91.67% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.28, TXN pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.9% |
5.2 History
The dividend of TXN is nicely growing with an annual growth rate of 13.63%!
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)13.63%
Div Incr Years21
Div Non Decr Years26
5.3 Sustainability
TXN pays out 95.87% of its income as dividend. This is not a sustainable payout ratio.
The dividend of TXN is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP95.87%
EPS Next 2Y-8.45%
EPS Next 3Y2.31%
TEXAS INSTRUMENTS INC
NASDAQ:TXN (1/21/2025, 8:00:02 PM)
After market: 194.8 -0.43 (-0.22%)195.23
+2.81 (+1.46%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners91.78%
Inst Owner Change0.49%
Ins Owners0.22%
Ins Owner Change-1.88%
Market Cap178.09B
Analysts65.64
Price Target211.18 (8.17%)
Short Float %2.23%
Short Ratio3.63
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.9% |
Yearly Dividend5.02
Dividend Growth(5Y)13.63%
DP95.87%
Div Incr Years21
Div Non Decr Years26
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.66%
Min EPS beat(2)3.53%
Max EPS beat(2)5.79%
EPS beat(4)4
Avg EPS beat(4)5.27%
Min EPS beat(4)0.57%
Max EPS beat(4)11.19%
EPS beat(8)8
Avg EPS beat(8)4.57%
EPS beat(12)12
Avg EPS beat(12)6.25%
EPS beat(16)15
Avg EPS beat(16)7.66%
Revenue beat(2)0
Avg Revenue beat(2)-0.63%
Min Revenue beat(2)-1.01%
Max Revenue beat(2)-0.24%
Revenue beat(4)1
Avg Revenue beat(4)-0.71%
Min Revenue beat(4)-1.97%
Max Revenue beat(4)0.38%
Revenue beat(8)3
Avg Revenue beat(8)-0.35%
Revenue beat(12)7
Avg Revenue beat(12)1.7%
Revenue beat(16)10
Avg Revenue beat(16)2.61%
PT rev (1m)0.16%
PT rev (3m)0.49%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-14.08%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.61%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-6.95%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.42%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.29 | ||
| Fwd PE | 32.99 | ||
| P/S | 11.34 | ||
| P/FCF | 121.32 | ||
| P/OCF | 28.52 | ||
| P/B | 10.31 | ||
| P/tB | 14.05 | ||
| EV/EBITDA | 25 |
EPS(TTM)5.38
EY2.76%
EPS(NY)5.92
Fwd EY3.03%
FCF(TTM)1.61
FCFY0.82%
OCF(TTM)6.84
OCFY3.51%
SpS17.22
BVpS18.93
TBVpS13.9
PEG (NY)N/A
PEG (5Y)7.65
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.99% | ||
| ROE | 28.61% | ||
| ROCE | 17.38% | ||
| ROIC | 15.2% | ||
| ROICexc | 21.02% | ||
| ROICexgc | 26.29% | ||
| OM | 34.99% | ||
| PM (TTM) | 31.44% | ||
| GM | 58.63% | ||
| FCFM | 9.34% |
ROA(3y)27.8%
ROA(5y)27.97%
ROE(3y)52.04%
ROE(5y)54.54%
ROIC(3y)31.77%
ROIC(5y)31.43%
ROICexc(3y)51.71%
ROICexc(5y)50.46%
ROICexgc(3y)75.15%
ROICexgc(5y)80.42%
ROCE(3y)36.32%
ROCE(5y)35.92%
ROICexcg growth 3Y-23.4%
ROICexcg growth 5Y-18.12%
ROICexc growth 3Y-14.3%
ROICexc growth 5Y-11.06%
OM growth 3Y0.75%
OM growth 5Y-0.33%
PM growth 3Y-1.34%
PM growth 5Y1.05%
GM growth 3Y-0.63%
GM growth 5Y-0.69%
F-Score3
Asset Turnover0.44
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.74 | ||
| Debt/FCF | 9.46 | ||
| Debt/EBITDA | 1.84 | ||
| Cap/Depr | 322.27% | ||
| Cap/Sales | 30.4% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 89.47% | ||
| Profit Quality | 29.72% | ||
| Current Ratio | 4.31 | ||
| Quick Ratio | 3.14 | ||
| Altman-Z | 9.28 |
F-Score3
WACC14.58%
ROIC/WACC1.04
Cap/Depr(3y)317.79%
Cap/Depr(5y)219.9%
Cap/Sales(3y)18.78%
Cap/Sales(5y)13.34%
Profit Quality(3y)56.73%
Profit Quality(5y)77.03%
High Growth Momentum
Growth
EPS 1Y (TTM)-30.13%
EPS 3Y6.71%
EPS 5Y4.74%
EPS Q2Q%-20.54%
EPS Next Y-27.1%
EPS Next 2Y-8.45%
EPS Next 3Y2.31%
EPS Next 5Y11.45%
Revenue 1Y (TTM)-13.26%
Revenue growth 3Y6.6%
Revenue growth 5Y2.11%
Sales Q2Q%-8.41%
Revenue Next Year-11.71%
Revenue Next 2Y-1.12%
Revenue Next 3Y3.74%
Revenue Next 5Y6.85%
EBIT growth 1Y-31.48%
EBIT growth 3Y7.4%
EBIT growth 5Y1.77%
EBIT Next Year-6.29%
EBIT Next 3Y12.53%
EBIT Next 5Y13.35%
FCF growth 1Y-75.22%
FCF growth 3Y-37.37%
FCF growth 5Y-25.95%
OCF growth 1Y-30.89%
OCF growth 3Y1.5%
OCF growth 5Y-2.24%