Why TEXAS INSTRUMENTS INC (NASDAQ:TXN) provides a good dividend, while having solid fundamentals.

Our stock screening tool has identified TEXAS INSTRUMENTS INC (NASDAQ:TXN) as a strong dividend contender with robust fundamentals. TXN exhibits commendable financial health and profitability, all while offering a sustainable dividend. Let's delve into each aspect below.

Dividend Analysis for TXN

ChartMill provides a Dividend Rating for every stock, ranging from 0 to 10. This rating assesses various dividend aspects, including yield, growth, and sustainability. TXN earns a 7 out of 10:

• TXN's Dividend Yield is rather good when compared to the industry average which is at 2.83. TXN pays more dividend than 91.67% of the companies in the same industry.
• TXN's Dividend Yield is a higher than the S&P500 average which is at 2.44.
• 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 their dividend for at least 10 years, which is a reliable track record.
• TXN's earnings are growing more than its dividend. This makes the dividend growth sustainable.

Unpacking TXN's Health Rating

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. TXN has received a 6 out of 10:

• An Altman-Z score of 8.36 indicates that TXN is not in any danger for bankruptcy at the moment.
• With a decent Altman-Z score value of 8.36, TXN is doing good in the industry, outperforming 76.85% of the companies in the same industry.
• A Current Ratio of 4.12 indicates that TXN has no problem at all paying its short term obligations.
• The Current ratio of TXN (4.12) is better than 67.59% of its industry peers.
• TXN has a Quick Ratio of 2.88. This indicates that TXN is financially healthy and has no problem in meeting its short term obligations.
• With a decent Quick ratio value of 2.88, TXN is doing good in the industry, outperforming 60.19% of the companies in the same industry.

Profitability Insights: TXN

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of TXN, the assigned 8 is noteworthy for profitability:

• The Return On Assets of TXN (13.44%) is better than 84.26% of its industry peers.
• With an excellent Return On Equity value of 28.24%, 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 14.73% 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 11.60%.
• The last Return On Invested Capital (14.73%) 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.
• TXN has a Profit Margin of 30.52%. This is amongst the best in the industry. TXN outperforms 91.67% of its industry peers.
• The Operating Margin of TXN (34.15%) is better than 94.44% of its industry peers.
• With an excellent Gross Margin value of 58.14%, TXN belongs to the best of the industry, outperforming 84.26% of the companies in the same industry.

Every day, new Best Dividend stocks can be found on ChartMill in our Best Dividend screener.

Check the latest full fundamental report of TXN for a complete fundamental analysis.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.