TEXAS INSTRUMENTS INC (TXN) Stock Fundamental Analysis
USA - NASDAQ:TXN - US8825081040 - Common Stock
180.3 USD
+2.67 (+1.5%)
180.15 USD
-0.15 (-0.08%)
TXN gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 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. 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.
In the past year TXN had a positive cash flow from operations.
Each year in the past 5 years TXN has been profitable.
TXN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
TXN's Return On Assets of 14.36% is amongst the best of the industry. TXN outperforms 87.50% of its industry peers.
The Return On Equity of TXN (30.57%) is better than 91.07% of its industry peers.
TXN's Return On Invested Capital of 15.76% is amongst the best of the industry. TXN outperforms 91.07% of its industry peers.
The Average Return On Invested Capital over the past 3 years for TXN is significantly above the industry average of 10.87%.
The last Return On Invested Capital (15.76%) 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 | 30.57% | ||
| ROIC | 15.76% |
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
The Profit Margin of TXN (30.07%) is better than 91.96% of its industry peers.
TXN's Profit Margin has declined in the last couple of years.
The Operating Margin of TXN (34.89%) is better than 92.86% of its industry peers.
TXN's Operating Margin has declined in the last couple of years.
TXN has a better Gross Margin (58.03%) than 82.14% of its industry peers.
TXN's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 34.89% | ||
| PM (TTM) | 30.07% | ||
| GM | 58.03% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so TXN 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 8.76. This indicates that TXN is financially healthy and has little risk of bankruptcy at the moment.
TXN has a Altman-Z score of 8.76. This is in the better half of the industry: TXN outperforms 71.43% of its industry peers.
TXN has a debt to FCF ratio of 9.34. This is a negative value and a sign of low solvency as TXN would need 9.34 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 9.34, TXN is in line with its industry, outperforming 47.32% of the companies in the same industry.
TXN has a Debt/Equity ratio of 0.86. This is a neutral value indicating TXN is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.86, TXN is doing worse than 82.14% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.86 | ||
| Debt/FCF | 9.34 | ||
| Altman-Z | 8.76 |
ROIC/WACC1.4
WACC11.22%
2.3 Liquidity
A Current Ratio of 5.81 indicates that TXN has no problem at all paying its short term obligations.
TXN has a Current ratio of 5.81. This is amongst the best in the industry. TXN outperforms 81.25% of its industry peers.
TXN has a Quick Ratio of 3.88. This indicates that TXN is financially healthy and has no problem in meeting its short term obligations.
Looking at the Quick ratio, with a value of 3.88, TXN is in the better half of the industry, outperforming 71.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 5.81 | ||
| Quick Ratio | 3.88 |
3. Growth
3.1 Past
TXN shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -5.21%.
TXN shows a small growth in Revenue. In the last year, the Revenue has grown by 3.62%.
The Revenue has been growing slightly by 1.69% on average over the past years.
EPS 1Y (TTM)-5.21%
EPS 3Y-14.28%
EPS 5Y0%
EPS Q2Q%15.57%
Revenue 1Y (TTM)3.62%
Revenue growth 3Y-5.17%
Revenue growth 5Y1.69%
Sales Q2Q%16.38%
3.2 Future
The Earnings Per Share is expected to grow by 16.92% on average over the next years. This is quite good.
TXN is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.29% yearly.
EPS Next Y9.16%
EPS Next 2Y14.04%
EPS Next 3Y15.65%
EPS Next 5Y16.92%
Revenue Next Year13.95%
Revenue Next 2Y12.08%
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.
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
TXN is valuated quite expensively with a Price/Earnings ratio of 33.02.
Based on the Price/Earnings ratio, TXN is valued a bit cheaper than the industry average as 65.18% of the companies are valued more expensively.
TXN is valuated rather expensively when we compare the Price/Earnings ratio to 27.20, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 26.71, which means the current valuation is very expensive for TXN.
61.61% of the companies in the same industry are more expensive than TXN, based on the Price/Forward Earnings ratio.
TXN is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.70, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.02 | ||
| Fwd PE | 26.71 |
4.2 Price Multiples
TXN's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. TXN is cheaper than 69.64% 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 | 109.06 | ||
| EV/EBITDA | 22.15 |
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 15.65% in the coming years.
PEG (NY)3.61
PEG (5Y)N/A
EPS Next 2Y14.04%
EPS Next 3Y15.65%
5. Dividend
5.1 Amount
TXN has a Yearly Dividend Yield of 2.95%. 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 2.31. TXN pays more dividend than 93.75% of the companies in the same industry.
TXN's Dividend Yield is a higher than the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.95% |
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 97.71% 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.
DP97.71%
EPS Next 2Y14.04%
EPS Next 3Y15.65%
180.3
+2.67 (+1.5%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners90.52%
Inst Owner Change0.22%
Ins Owners0.22%
Ins Owner Change-0.01%
Market Cap163.92B
Analysts68.18
Price Target204.63 (13.49%)
Short Float %1.83%
Short Ratio2.37
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.95% |
Yearly Dividend5.27
Dividend Growth(5Y)10.46%
DP97.71%
Div Incr Years21
Div Non Decr Years26
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.93%
Min EPS beat(2)3.14%
Max EPS beat(2)18.72%
EPS beat(4)4
Avg EPS beat(4)8.63%
Min EPS beat(4)3.14%
Max EPS beat(4)18.72%
EPS beat(8)8
Avg EPS beat(8)6.33%
EPS beat(12)12
Avg EPS beat(12)5.55%
EPS beat(16)15
Avg EPS beat(16)6.47%
Revenue beat(2)2
Avg Revenue beat(2)2.05%
Min Revenue beat(2)1.09%
Max Revenue beat(2)3.01%
Revenue beat(4)3
Avg Revenue beat(4)1.56%
Min Revenue beat(4)-0.24%
Max Revenue beat(4)3.01%
Revenue beat(8)4
Avg Revenue beat(8)0.2%
Revenue beat(12)7
Avg Revenue beat(12)0.38%
Revenue beat(16)10
Avg Revenue beat(16)1.6%
PT rev (1m)-0.2%
PT rev (3m)13.27%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.02%
EPS NY rev (1m)0.8%
EPS NY rev (3m)1.38%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.4%
Revenue NY rev (1m)-0.1%
Revenue NY rev (3m)1.95%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.02 | ||
| Fwd PE | 26.71 | ||
| P/S | 9.83 | ||
| P/FCF | 109.06 | ||
| P/OCF | 25.46 | ||
| P/B | 9.99 | ||
| P/tB | 13.9 | ||
| EV/EBITDA | 22.15 |
EPS(TTM)5.46
EY3.03%
EPS(NY)6.75
Fwd EY3.74%
FCF(TTM)1.65
FCFY0.92%
OCF(TTM)7.08
OCFY3.93%
SpS18.34
BVpS18.04
TBVpS12.97
PEG (NY)3.61
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.36% | ||
| ROE | 30.57% | ||
| ROCE | 17.93% | ||
| ROIC | 15.76% | ||
| ROICexc | 18.88% | ||
| ROICexgc | 22.75% | ||
| OM | 34.89% | ||
| PM (TTM) | 30.07% | ||
| GM | 58.03% | ||
| FCFM | 9.01% |
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-Score6
Asset Turnover0.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.86 | ||
| Debt/FCF | 9.34 | ||
| Debt/EBITDA | 1.85 | ||
| Cap/Depr | 280.14% | ||
| Cap/Sales | 29.6% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 84.95% | ||
| Profit Quality | 29.97% | ||
| Current Ratio | 5.81 | ||
| Quick Ratio | 3.88 | ||
| Altman-Z | 8.76 |
F-Score6
WACC11.22%
ROIC/WACC1.4
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)-5.21%
EPS 3Y-14.28%
EPS 5Y0%
EPS Q2Q%15.57%
EPS Next Y9.16%
EPS Next 2Y14.04%
EPS Next 3Y15.65%
EPS Next 5Y16.92%
Revenue 1Y (TTM)3.62%
Revenue growth 3Y-5.17%
Revenue growth 5Y1.69%
Sales Q2Q%16.38%
Revenue Next Year13.95%
Revenue Next 2Y12.08%
Revenue Next 3Y11.16%
Revenue Next 5Y10.29%
EBIT growth 1Y-0.29%
EBIT growth 3Y-16.01%
EBIT growth 5Y-1.25%
EBIT Next Year50.98%
EBIT Next 3Y27.48%
EBIT Next 5Y22.04%
FCF growth 1Y-52.77%
FCF growth 3Y-38.03%
FCF growth 5Y-23.72%
OCF growth 1Y-12.6%
OCF growth 3Y-10.31%
OCF growth 5Y-1.02%