TEXAS INSTRUMENTS INC (TXN) Stock Fundamental Analysis
NASDAQ:TXN - Nasdaq - US8825081040 - Common Stock - Currency: USD
TXN gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 108 industry peers in the Semiconductors & Semiconductor Equipment industry. TXN has an excellent profitability rating, but there are some minor concerns on its financial health. While showing a medium growth rate, TXN is valued expensive at the moment. 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.
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 (13.44%) than 83.33% of its industry peers.
TXN's Return On Equity of 28.24% is amongst the best of the industry. TXN outperforms 90.74% of its industry peers.
TXN has a Return On Invested Capital of 14.73%. This is amongst the best in the industry. TXN outperforms 86.11% 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 11.67%.
The 3 year average ROIC (24.88%) for TXN is well above the current ROIC(14.73%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.44% | ||
| ROE | 28.24% | ||
| ROIC | 14.73% |
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 30.52%, TXN belongs to the best of the industry, outperforming 92.59% of the companies in the same industry.
TXN's Profit Margin has declined in the last couple of years.
The Operating Margin of TXN (34.15%) is better than 94.44% of its industry peers.
In the last couple of years the Operating Margin of TXN has declined.
TXN has a better Gross Margin (58.14%) than 82.41% of its industry peers.
TXN's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 34.15% | ||
| PM (TTM) | 30.52% | ||
| GM | 58.14% |
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.
The number of shares outstanding for TXN has been increased compared to 1 year ago.
Compared to 5 years ago, TXN has less shares outstanding
TXN has a worse debt/assets ratio than last year.
2.2 Solvency
TXN has an Altman-Z score of 9.37. This indicates that TXN is financially healthy and has little risk of bankruptcy at the moment.
TXN has a better Altman-Z score (9.37) than 77.78% of its industry peers.
TXN has a debt to FCF ratio of 9.08. This is a negative value and a sign of low solvency as TXN would need 9.08 years to pay back of all of its debts.
TXN has a Debt to FCF ratio of 9.08. This is comparable to the rest of the industry: TXN outperforms 53.70% of its industry peers.
A Debt/Equity ratio of 0.76 indicates that TXN is somewhat dependend on debt financing.
TXN has a Debt to Equity ratio of 0.76. This is amonst the worse of the industry: TXN underperforms 80.56% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.76 | ||
| Debt/FCF | 9.08 | ||
| Altman-Z | 9.37 |
ROIC/WACC1.24
WACC11.84%
2.3 Liquidity
TXN has a Current Ratio of 4.12. This indicates that TXN is financially healthy and has no problem in meeting its short term obligations.
With a decent Current ratio value of 4.12, TXN is doing good in the industry, outperforming 70.37% of the companies in the same industry.
A Quick Ratio of 2.88 indicates that TXN has no problem at all paying its short term obligations.
TXN's Quick ratio of 2.88 is fine compared to the rest of the industry. TXN outperforms 62.04% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.12 | ||
| Quick Ratio | 2.88 |
3. Growth
3.1 Past
TXN shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -26.49%.
Looking at the last year, TXN shows a very negative growth in Revenue. The Revenue has decreased by -10.72% in the last year.
Measured over the past years, TXN shows a small growth in Revenue. The Revenue has been growing by 1.69% on average per year.
EPS 1Y (TTM)-26.49%
EPS 3Y-14.28%
EPS 5Y0%
EPS Q2Q%-12.75%
Revenue 1Y (TTM)-10.72%
Revenue growth 3Y-5.17%
Revenue growth 5Y1.69%
Sales Q2Q%-1.72%
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 18.55% on average per year.
The Revenue is expected to grow by 10.33% on average over the next years. This is quite good.
EPS Next Y5.89%
EPS Next 2Y16.73%
EPS Next 3Y17.25%
EPS Next 5Y18.55%
Revenue Next Year10.68%
Revenue Next 2Y12.01%
Revenue Next 3Y11.66%
Revenue Next 5Y10.33%
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.
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
A Price/Earnings ratio of 38.92 indicates a quite expensive valuation of TXN.
TXN's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 29.63, TXN is valued a bit more expensive.
Based on the Price/Forward Earnings ratio of 36.76, the valuation of TXN can be described as expensive.
TXN's Price/Forward Earnings is on the same level as the industry average.
When comparing the Price/Forward Earnings ratio of TXN to the average of the S&P500 Index (22.68), we can say TXN is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.92 | ||
| Fwd PE | 36.76 |
4.2 Price Multiples
66.67% of the companies in the same industry are more expensive than TXN, based on the Enterprise Value to EBITDA ratio.
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 | 122.84 | ||
| EV/EBITDA | 27.08 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of TXN may justify a higher PE ratio.
TXN's earnings are expected to grow with 17.25% in the coming years. This may justify a more expensive valuation.
PEG (NY)6.61
PEG (5Y)N/A
EPS Next 2Y16.73%
EPS Next 3Y17.25%
5. Dividend
5.1 Amount
TXN has a Yearly Dividend Yield of 3.01%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.34, TXN pays a better dividend. On top of this TXN pays more dividend than 92.59% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.29, TXN pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.01% |
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
TXN pays out 100.44% 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.
DP100.44%
EPS Next 2Y16.73%
EPS Next 3Y17.25%
202
-1.96 (-0.96%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners91.78%
Inst Owner Change-0.26%
Ins Owners0.22%
Ins Owner Change2.3%
Market Cap184.02B
Analysts66.15
Price Target207.44 (2.69%)
Short Float %1.93%
Short Ratio2.97
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.01% |
Yearly Dividend5.27
Dividend Growth(5Y)10.46%
DP100.44%
Div Incr Years21
Div Non Decr Years26
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)6.33%
Min EPS beat(2)5.79%
Max EPS beat(2)6.88%
EPS beat(4)4
Avg EPS beat(4)6.84%
Min EPS beat(4)3.53%
Max EPS beat(4)11.19%
EPS beat(8)8
Avg EPS beat(8)4.62%
EPS beat(12)12
Avg EPS beat(12)5.52%
EPS beat(16)15
Avg EPS beat(16)6.77%
Revenue beat(2)1
Avg Revenue beat(2)1.07%
Min Revenue beat(2)-0.24%
Max Revenue beat(2)2.38%
Revenue beat(4)2
Avg Revenue beat(4)0.38%
Min Revenue beat(4)-1.01%
Max Revenue beat(4)2.38%
Revenue beat(8)3
Avg Revenue beat(8)-0.07%
Revenue beat(12)7
Avg Revenue beat(12)1.23%
Revenue beat(16)10
Avg Revenue beat(16)2.01%
PT rev (1m)-1.77%
PT rev (3m)-1.16%
EPS NQ rev (1m)-9.93%
EPS NQ rev (3m)-21.63%
EPS NY rev (1m)-7.12%
EPS NY rev (3m)-7.48%
Revenue NQ rev (1m)0.92%
Revenue NQ rev (3m)-5.61%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)-0.24%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.92 | ||
| Fwd PE | 36.76 | ||
| P/S | 11.77 | ||
| P/FCF | 122.84 | ||
| P/OCF | 29.13 | ||
| P/B | 10.89 | ||
| P/tB | 14.98 | ||
| EV/EBITDA | 27.08 |
EPS(TTM)5.19
EY2.57%
EPS(NY)5.5
Fwd EY2.72%
FCF(TTM)1.64
FCFY0.81%
OCF(TTM)6.94
OCFY3.43%
SpS17.17
BVpS18.55
TBVpS13.48
PEG (NY)6.61
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.44% | ||
| ROE | 28.24% | ||
| ROCE | 16.76% | ||
| ROIC | 14.73% | ||
| ROICexc | 19.33% | ||
| ROICexgc | 23.87% | ||
| OM | 34.15% | ||
| PM (TTM) | 30.52% | ||
| GM | 58.14% | ||
| FCFM | 9.58% |
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-Score4
Asset Turnover0.44
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.76 | ||
| Debt/FCF | 9.08 | ||
| Debt/EBITDA | 1.86 | ||
| Cap/Depr | 305.06% | ||
| Cap/Sales | 30.82% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 91.29% | ||
| Profit Quality | 31.38% | ||
| Current Ratio | 4.12 | ||
| Quick Ratio | 2.88 | ||
| Altman-Z | 9.37 |
F-Score4
WACC11.84%
ROIC/WACC1.24
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)-26.49%
EPS 3Y-14.28%
EPS 5Y0%
EPS Q2Q%-12.75%
EPS Next Y5.89%
EPS Next 2Y16.73%
EPS Next 3Y17.25%
EPS Next 5Y18.55%
Revenue 1Y (TTM)-10.72%
Revenue growth 3Y-5.17%
Revenue growth 5Y1.69%
Sales Q2Q%-1.72%
Revenue Next Year10.68%
Revenue Next 2Y12.01%
Revenue Next 3Y11.66%
Revenue Next 5Y10.33%
EBIT growth 1Y-27.14%
EBIT growth 3Y-16.01%
EBIT growth 5Y-1.25%
EBIT Next Year49.72%
EBIT Next 3Y27.3%
EBIT Next 5Y22.78%
FCF growth 1Y11.05%
FCF growth 3Y-38.03%
FCF growth 5Y-23.72%
OCF growth 1Y-1.59%
OCF growth 3Y-10.31%
OCF growth 5Y-1.02%