TEXAS INSTRUMENTS INC (TXN) Stock Fundamental Analysis
USA - NASDAQ:TXN - US8825081040 - Common Stock
166.91 USD
-2.5 (-1.48%)
166.83 USD
-0.08 (-0.05%)
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 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. 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.
TXN had a positive operating cash flow in the past year.
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 has a better Return On Assets (14.33%) than 87.50% of its industry peers.
The Return On Equity of TXN (30.17%) is better than 91.07% of its industry peers.
TXN's Return On Invested Capital of 16.57% is amongst the best of the industry. TXN outperforms 91.07% of its industry peers.
TXN had an Average Return On Invested Capital over the past 3 years of 24.88%. This is significantly above the industry average of 11.03%.
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 better Profit Margin (29.05%) than 89.29% of its industry peers.
TXN's Profit Margin has declined in the last couple of years.
The Operating Margin of TXN (34.82%) is better than 92.86% of its industry peers.
In the last couple of years the Operating Margin of TXN has declined.
Looking at the Gross Margin, with a value of 57.48%, TXN belongs to the top of the industry, outperforming 82.14% of the companies in the same industry.
TXN's Gross Margin has declined in the last couple of years.
| 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
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.
TXN has less shares outstanding than it did 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 8.55. This indicates that TXN is financially healthy and has little risk of bankruptcy at the moment.
TXN's Altman-Z score of 8.55 is fine compared to the rest of the industry. TXN outperforms 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.
TXN has a Debt to FCF ratio (6.75) which is in line with its industry peers.
A Debt/Equity ratio of 0.81 indicates that TXN is somewhat dependend on debt financing.
TXN has a Debt to Equity ratio of 0.81. This is amonst the worse of the industry: TXN underperforms 81.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.81 | ||
| Debt/FCF | 6.75 | ||
| Altman-Z | 8.55 |
ROIC/WACC1.44
WACC11.54%
2.3 Liquidity
A Current Ratio of 4.45 indicates that TXN has no problem at all paying its short term obligations.
With a decent Current ratio value of 4.45, TXN is doing good in the industry, outperforming 66.96% of the companies in the same industry.
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 has a Quick ratio of 2.90. This is in the better half of the industry: TXN outperforms 61.61% 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%.
Looking at the last year, TXN shows a quite strong growth in Revenue. The Revenue has grown by 9.90% in the last year.
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
Based on estimates for the next years, TXN will show a quite strong growth in Earnings Per Share. The EPS will grow by 16.92% on average per year.
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
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
Based on the Price/Earnings ratio of 30.51, the valuation of TXN can be described as expensive.
Based on the Price/Earnings ratio, TXN is valued a bit cheaper than 77.68% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.83, TXN is valued at the same level.
Based on the Price/Forward Earnings ratio of 24.92, the valuation of TXN can be described as rather expensive.
71.43% of the companies in the same industry are more expensive than TXN, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.88, TXN is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.51 | ||
| Fwd PE | 24.92 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TXN indicates a somewhat cheap valuation: TXN is cheaper than 72.32% of the companies listed in the same industry.
TXN's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 72.95 | ||
| EV/EBITDA | 20.41 |
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)3.44
PEG (5Y)N/A
EPS Next 2Y13.6%
EPS Next 3Y15.48%
5. Dividend
5.1 Amount
TXN has a Yearly Dividend Yield of 3.36%.
TXN's Dividend Yield is rather good when compared to the industry average which is at 2.18. TXN pays more dividend than 94.64% of the companies in the same industry.
TXN's Dividend Yield is a higher than the S&P500 average which is at 2.30.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.36% |
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 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%
166.91
-2.5 (-1.48%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners91.03%
Inst Owner Change-0.02%
Ins Owners0.22%
Ins Owner Change-0.01%
Market Cap151.74B
Revenue(TTM)17.27B
Net Income(TTM)5.02B
Analysts68.18
Price Target204.63 (22.6%)
Short Float %1.73%
Short Ratio2.15
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.36% |
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)0%
PT rev (3m)4.43%
EPS NQ rev (1m)-1.37%
EPS NQ rev (3m)-1.9%
EPS NY rev (1m)-0.26%
EPS NY rev (3m)0.52%
Revenue NQ rev (1m)-0.57%
Revenue NQ rev (3m)-0.83%
Revenue NY rev (1m)-0.13%
Revenue NY rev (3m)1.47%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.51 | ||
| Fwd PE | 24.92 | ||
| P/S | 8.79 | ||
| P/FCF | 72.95 | ||
| P/OCF | 22 | ||
| P/B | 9.13 | ||
| P/tB | 12.62 | ||
| EV/EBITDA | 20.41 |
EPS(TTM)5.47
EY3.28%
EPS(NY)6.7
Fwd EY4.01%
FCF(TTM)2.29
FCFY1.37%
OCF(TTM)7.59
OCFY4.55%
SpS18.99
BVpS18.29
TBVpS13.23
PEG (NY)3.44
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 | 8.55 |
F-Score7
WACC11.54%
ROIC/WACC1.44
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.