TEXAS INSTRUMENTS INC (TXN) Stock Fundamental Analysis
NASDAQ:TXN - Nasdaq - US8825081040 - Common Stock - Currency: USD
Taking everything into account, TXN scores 6 out of 10 in our fundamental rating. TXN was compared to 110 industry peers in the Semiconductors & Semiconductor Equipment industry. While TXN has a great profitability rating, 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.
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 (14.36%) is better than 85.45% of its industry peers.
With an excellent Return On Equity value of 29.54%, TXN belongs to the best of the industry, outperforming 91.82% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 15.47%, TXN belongs to the top of the industry, outperforming 90.00% 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 10.58%.
The last Return On Invested Capital (15.47%) 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 | 14.36% | ||
| ROE | 29.54% | ||
| ROIC | 15.47% |
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
With an excellent Profit Margin value of 30.20%, TXN belongs to the best of the industry, outperforming 91.82% of the companies in the same industry.
In the last couple of years the Profit Margin of TXN has declined.
The Operating Margin of TXN (34.29%) is better than 93.64% of its industry peers.
In the last couple of years the Operating Margin of TXN has declined.
TXN has a better Gross Margin (58.02%) than 82.73% of its industry peers.
TXN's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 34.29% | ||
| PM (TTM) | 30.2% | ||
| GM | 58.02% |
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.
TXN has more shares outstanding than it did 1 year ago.
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
An Altman-Z score of 10.51 indicates that TXN is not in any danger for bankruptcy at the moment.
TXN's Altman-Z score of 10.51 is fine compared to the rest of the industry. TXN outperforms 78.18% of its industry peers.
TXN has a debt to FCF ratio of 8.83. This is a slightly negative value and a sign of low solvency as TXN would need 8.83 years to pay back of all of its debts.
With a Debt to FCF ratio value of 8.83, TXN perfoms like the industry average, outperforming 47.27% of the companies in the same industry.
A Debt/Equity ratio of 0.78 indicates that TXN is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.78, TXN is doing worse than 80.91% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 8.83 | ||
| Altman-Z | 10.51 |
ROIC/WACC1.34
WACC11.56%
2.3 Liquidity
A Current Ratio of 5.26 indicates that TXN has no problem at all paying its short term obligations.
The Current ratio of TXN (5.26) is better than 79.09% of its industry peers.
A Quick Ratio of 3.37 indicates that TXN has no problem at all paying its short term obligations.
TXN has a better Quick ratio (3.37) than 65.45% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 5.26 | ||
| Quick Ratio | 3.37 |
3. Growth
3.1 Past
TXN shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -17.78%.
TXN shows a decrease in Revenue. In the last year, the revenue decreased by -4.48%.
The Revenue has been growing slightly by 1.69% on average over the past years.
EPS 1Y (TTM)-17.78%
EPS 3Y-14.28%
EPS 5Y0%
EPS Q2Q%6.67%
Revenue 1Y (TTM)-4.48%
Revenue growth 3Y-5.17%
Revenue growth 5Y1.69%
Sales Q2Q%11.14%
3.2 Future
The Earnings Per Share is expected to grow by 17.38% on average over the next years. This is quite good.
Based on estimates for the next years, TXN will show a quite strong growth in Revenue. The Revenue will grow by 10.81% on average per year.
EPS Next Y8.29%
EPS Next 2Y14.05%
EPS Next 3Y16.07%
EPS Next 5Y17.38%
Revenue Next Year12.15%
Revenue Next 2Y11.39%
Revenue Next 3Y11.15%
Revenue Next 5Y10.81%
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
A Price/Earnings ratio of 41.98 indicates a quite expensive valuation of TXN.
TXN's Price/Earnings ratio is in line with the industry average.
TXN's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.30.
A Price/Forward Earnings ratio of 32.78 indicates a quite expensive valuation of TXN.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TXN is on the same level as its industry peers.
The average S&P500 Price/Forward Earnings ratio is at 21.76. TXN is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.98 | ||
| Fwd PE | 32.78 |
4.2 Price Multiples
TXN's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. TXN is cheaper than 61.82% 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 | 138.14 | ||
| EV/EBITDA | 28.83 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
TXN has an outstanding profitability rating, which may justify a higher PE ratio.
TXN's earnings are expected to grow with 16.07% in the coming years. This may justify a more expensive valuation.
PEG (NY)5.06
PEG (5Y)N/A
EPS Next 2Y14.05%
EPS Next 3Y16.07%
5. Dividend
5.1 Amount
TXN has a Yearly Dividend Yield of 2.48%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.17, TXN pays a better dividend. On top of this TXN pays more dividend than 92.73% of the companies listed in the same industry.
TXN's Dividend Yield is comparable with the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.48% |
5.2 History
The dividend of TXN is nicely growing with an annual growth rate of 10.46%!
TXN has paid a dividend for at least 10 years, which is 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 100.06% 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.
DP100.06%
EPS Next 2Y14.05%
EPS Next 3Y16.07%
221.25
+1.59 (+0.72%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners90.39%
Inst Owner Change0%
Ins Owners0.22%
Ins Owner Change3.93%
Market Cap201.00B
Analysts67.62
Price Target184.07 (-16.8%)
Short Float %1.86%
Short Ratio2.38
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.48% |
Yearly Dividend5.27
Dividend Growth(5Y)10.46%
DP100.06%
Div Incr Years21
Div Non Decr Years26
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)12.8%
Min EPS beat(2)6.88%
Max EPS beat(2)18.72%
EPS beat(4)4
Avg EPS beat(4)8.73%
Min EPS beat(4)3.53%
Max EPS beat(4)18.72%
EPS beat(8)8
Avg EPS beat(8)6.58%
EPS beat(12)12
Avg EPS beat(12)6.5%
EPS beat(16)15
Avg EPS beat(16)6.94%
Revenue beat(2)2
Avg Revenue beat(2)2.69%
Min Revenue beat(2)2.38%
Max Revenue beat(2)3.01%
Revenue beat(4)2
Avg Revenue beat(4)1.03%
Min Revenue beat(4)-1.01%
Max Revenue beat(4)3.01%
Revenue beat(8)4
Avg Revenue beat(8)0.42%
Revenue beat(12)7
Avg Revenue beat(12)1.28%
Revenue beat(16)10
Avg Revenue beat(16)1.8%
PT rev (1m)1.89%
PT rev (3m)-10.88%
EPS NQ rev (1m)0.07%
EPS NQ rev (3m)7.71%
EPS NY rev (1m)0.57%
EPS NY rev (3m)2.97%
Revenue NQ rev (1m)0.09%
Revenue NQ rev (3m)4.49%
Revenue NY rev (1m)0.34%
Revenue NY rev (3m)2.02%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.98 | ||
| Fwd PE | 32.78 | ||
| P/S | 12.52 | ||
| P/FCF | 138.14 | ||
| P/OCF | 32.68 | ||
| P/B | 12.25 | ||
| P/tB | 17.06 | ||
| EV/EBITDA | 28.83 |
EPS(TTM)5.27
EY2.38%
EPS(NY)6.75
Fwd EY3.05%
FCF(TTM)1.6
FCFY0.72%
OCF(TTM)6.77
OCFY3.06%
SpS17.67
BVpS18.06
TBVpS12.97
PEG (NY)5.06
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.36% | ||
| ROE | 29.54% | ||
| ROCE | 17.6% | ||
| ROIC | 15.47% | ||
| ROICexc | 18.41% | ||
| ROICexgc | 22.35% | ||
| OM | 34.29% | ||
| PM (TTM) | 30.2% | ||
| GM | 58.02% | ||
| FCFM | 9.07% |
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%
ROICexcg growth 3Y-37.97%
ROICexcg 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-Score5
Asset Turnover0.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 8.83 | ||
| Debt/EBITDA | 1.79 | ||
| Cap/Depr | 282.49% | ||
| Cap/Sales | 29.25% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 85.83% | ||
| Profit Quality | 30.02% | ||
| Current Ratio | 5.26 | ||
| Quick Ratio | 3.37 | ||
| Altman-Z | 10.51 |
F-Score5
WACC11.56%
ROIC/WACC1.34
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)-17.78%
EPS 3Y-14.28%
EPS 5Y0%
EPS Q2Q%6.67%
EPS Next Y8.29%
EPS Next 2Y14.05%
EPS Next 3Y16.07%
EPS Next 5Y17.38%
Revenue 1Y (TTM)-4.48%
Revenue growth 3Y-5.17%
Revenue growth 5Y1.69%
Sales Q2Q%11.14%
Revenue Next Year12.15%
Revenue Next 2Y11.39%
Revenue Next 3Y11.15%
Revenue Next 5Y10.81%
EBIT growth 1Y-16.1%
EBIT growth 3Y-16.01%
EBIT growth 5Y-1.25%
EBIT Next Year46.85%
EBIT Next 3Y26.02%
EBIT Next 5Y22.18%
FCF growth 1Y-66.93%
FCF growth 3Y-38.03%
FCF growth 5Y-23.72%
OCF growth 1Y-20.5%
OCF growth 3Y-10.31%
OCF growth 5Y-1.02%