TEXAS INSTRUMENTS INC (TXN) Stock Fundamental Analysis
USA - NASDAQ:TXN - US8825081040 - Common Stock
160.55 USD
-0.83 (-0.51%)
160.67 USD
+0.12 (+0.07%)
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 has a great profitability rating, 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
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.
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 88.39% of its industry peers.
The Return On Equity of TXN (30.17%) is better than 91.96% of its industry peers.
With an excellent Return On Invested Capital value of 16.57%, TXN belongs to the best of the industry, outperforming 90.18% of the companies in the same industry.
TXN had an Average Return On Invested Capital over the past 3 years of 24.88%. This is significantly above the industry average of 11.07%.
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
TXN has a Profit Margin of 29.05%. This is amongst the best in the industry. TXN outperforms 89.29% 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 92.86% of its industry peers.
TXN's Operating Margin has declined in the last couple of years.
TXN has a better Gross Margin (57.48%) 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
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
Compared to 5 years ago, TXN has less shares outstanding
The debt/assets ratio for TXN is higher compared to a year ago.
2.2 Solvency
TXN has an Altman-Z score of 8.31. This indicates that TXN is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of TXN (8.31) is better than 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.
With a Debt to FCF ratio value of 6.75, TXN perfoms like the industry average, outperforming 55.36% of the companies in the same industry.
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 | 8.31 |
ROIC/WACC1.42
WACC11.66%
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 67.86% 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's Quick ratio of 2.90 is fine compared to the rest of the industry. TXN outperforms 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.45 | ||
| Quick Ratio | 2.9 |
3. Growth
3.1 Past
TXN shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 1.67%.
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
TXN is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.92% yearly.
Based on estimates for the next years, TXN will show a quite strong growth in Revenue. The Revenue will grow by 10.29% on average per year.
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
TXN is valuated quite expensively with a Price/Earnings ratio of 29.35.
Based on the Price/Earnings ratio, TXN is valued a bit cheaper than 76.79% of the companies in the same industry.
When comparing the Price/Earnings ratio of TXN to the average of the S&P500 Index (25.83), we can say TXN is valued inline with the index average.
Based on the Price/Forward Earnings ratio of 23.97, the valuation of TXN can be described as rather expensive.
TXN's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. TXN is cheaper than 72.32% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 32.68. TXN is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.35 | ||
| Fwd PE | 23.97 |
4.2 Price Multiples
TXN's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. TXN is cheaper than 70.54% of the companies in the same industry.
TXN's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 70.17 | ||
| EV/EBITDA | 19.48 |
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.
A more expensive valuation may be justified as TXN's earnings are expected to grow with 15.48% in the coming years.
PEG (NY)3.31
PEG (5Y)N/A
EPS Next 2Y13.6%
EPS Next 3Y15.48%
5. Dividend
5.1 Amount
TXN has a Yearly Dividend Yield of 3.52%. 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 2.13. TXN pays more dividend than 95.54% of the companies in the same industry.
TXN's Dividend Yield is a higher than the S&P500 average which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.52% |
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 2Y13.6%
EPS Next 3Y15.48%
160.55
-0.83 (-0.51%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners91.03%
Inst Owner Change-0.44%
Ins Owners0.22%
Ins Owner Change-0.09%
Market Cap145.96B
Revenue(TTM)17.27B
Net Income(TTM)5.02B
Analysts66.82
Price Target190.1 (18.41%)
Short Float %1.73%
Short Ratio2.15
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.52% |
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)-7.1%
PT rev (3m)-2.98%
EPS NQ rev (1m)-9.17%
EPS NQ rev (3m)-9.23%
EPS NY rev (1m)-0.26%
EPS NY rev (3m)0.52%
Revenue NQ rev (1m)-1.9%
Revenue NQ rev (3m)-1.9%
Revenue NY rev (1m)-0.12%
Revenue NY rev (3m)-0.22%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.35 | ||
| Fwd PE | 23.97 | ||
| P/S | 8.45 | ||
| P/FCF | 70.17 | ||
| P/OCF | 21.16 | ||
| P/B | 8.78 | ||
| P/tB | 12.14 | ||
| EV/EBITDA | 19.48 |
EPS(TTM)5.47
EY3.41%
EPS(NY)6.7
Fwd EY4.17%
FCF(TTM)2.29
FCFY1.43%
OCF(TTM)7.59
OCFY4.73%
SpS18.99
BVpS18.29
TBVpS13.23
PEG (NY)3.31
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 | 8.31 |
F-Score7
WACC11.66%
ROIC/WACC1.42
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.