TEXAS INSTRUMENTS INC (TXN)
US8825081040 - Common Stock
Overall TXN gets a fundamental rating of 6 out of 10. We evaluated TXN against 107 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 is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
TXN had positive earnings in the past year.
TXN had a positive operating cash flow in the past year.
TXN had positive earnings in each of the past 5 years.
TXN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
TXN has a better Return On Assets (20.02%) than 94.34% of its industry peers.
TXN has a Return On Equity of 38.32%. This is amongst the best in the industry. TXN outperforms 94.34% of its industry peers.
The Return On Invested Capital of TXN (22.09%) is better than 93.40% of its industry peers.
TXN had an Average Return On Invested Capital over the past 3 years of 31.77%. This is significantly above the industry average of 10.84%.
The 3 year average ROIC (31.77%) for TXN is well above the current ROIC(22.09%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.02% | ||
| ROE | 38.32% | ||
| ROIC | 22.09% |
ROA(3y)27.8%
ROA(5y)27.97%
ROE(3y)52.04%
ROE(5y)54.54%
ROIC(3y)31.77%
ROIC(5y)31.43%
1.3 Margins
The Profit Margin of TXN (36.96%) is better than 96.23% of its industry peers.
In the last couple of years the Profit Margin of TXN has remained more or less at the same level.
The Operating Margin of TXN (41.85%) is better than 97.17% of its industry peers.
In the last couple of years the Operating Margin of TXN has remained more or less at the same level.
TXN's Gross Margin of 62.90% is amongst the best of the industry. TXN outperforms 86.79% of its industry peers.
TXN's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 41.85% | ||
| PM (TTM) | 36.96% | ||
| GM | 62.9% |
OM growth 3Y0.75%
OM growth 5Y-0.33%
PM growth 3Y-1.34%
PM growth 5Y1.05%
GM growth 3Y-0.63%
GM growth 5Y-0.69%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), 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
The debt/assets ratio for TXN is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 10.18 indicates that TXN is not in any danger for bankruptcy at the moment.
TXN has a Altman-Z score of 10.18. This is amongst the best in the industry. TXN outperforms 81.13% of its industry peers.
TXN has a debt to FCF ratio of 8.32. This is a slightly negative value and a sign of low solvency as TXN would need 8.32 years to pay back of all of its debts.
With a Debt to FCF ratio value of 8.32, TXN perfoms like the industry average, outperforming 50.94% of the companies in the same industry.
TXN has a Debt/Equity ratio of 0.63. This is a neutral value indicating TXN is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.63, TXN is not doing good in the industry: 76.42% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.63 | ||
| Debt/FCF | 8.32 | ||
| Altman-Z | 10.18 |
ROIC/WACC1.91
WACC11.54%
2.3 Liquidity
TXN has a Current Ratio of 4.55. This indicates that TXN is financially healthy and has no problem in meeting its short term obligations.
TXN has a better Current ratio (4.55) than 74.53% of its industry peers.
A Quick Ratio of 3.35 indicates that TXN has no problem at all paying its short term obligations.
TXN has a better Quick ratio (3.35) than 66.98% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.55 | ||
| Quick Ratio | 3.35 |
3. Growth
3.1 Past
TXN shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -24.73%.
The Earnings Per Share has been growing slightly by 4.74% on average over the past years.
Looking at the last year, TXN shows a very negative growth in Revenue. The Revenue has decreased by -12.53% in the last year.
TXN shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.11% yearly.
EPS 1Y (TTM)-24.73%
EPS 3Y6.71%
EPS 5Y4.74%
EPS growth Q2Q-30.05%
Revenue 1Y (TTM)-12.53%
Revenue growth 3Y6.6%
Revenue growth 5Y2.11%
Revenue growth Q2Q-12.7%
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 11.00% yearly.
Based on estimates for the next years, TXN will show a small growth in Revenue. The Revenue will grow by 7.92% on average per year.
EPS Next Y-27.39%
EPS Next 2Y-3.52%
EPS Next 3Y3.25%
EPS Next 5Y11%
Revenue Next Year-11.25%
Revenue Next 2Y0.76%
Revenue Next 3Y4.29%
Revenue Next 5Y7.92%
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
The Price/Earnings ratio is 25.14, which means the current valuation is very expensive for TXN.
66.98% of the companies in the same industry are more expensive than TXN, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 24.92. TXN is around the same levels.
With a Price/Forward Earnings ratio of 34.62, TXN can be considered very expensive at the moment.
The rest of the industry has a similar Price/Forward Earnings ratio as TXN.
When comparing the Price/Forward Earnings ratio of TXN to the average of the S&P500 Index (21.49), we can say TXN is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.14 | ||
| Fwd PE | 34.62 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TXN is valued a bit cheaper than 71.70% 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 | 119.63 | ||
| EV/EBITDA | 18.25 |
4.3 Compensation for Growth
TXN has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)5.3
EPS Next 2Y-3.52%
EPS Next 3Y3.25%
5. Dividend
5.1 Amount
TXN has a Yearly Dividend Yield of 2.97%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.09, TXN pays a better dividend. On top of this TXN pays more dividend than 94.34% of the companies listed in the same industry.
TXN's Dividend Yield is a higher than the S&P500 average which is at 2.43.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.97% |
5.2 History
The dividend of TXN is nicely growing with an annual growth rate of 13.63%!
TXN has paid a dividend for at least 10 years, which is 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)13.63%
Div Incr Years19
Div Non Decr Years19
5.3 Sustainability
70.38% of the earnings are spent on dividend by TXN. This is not a sustainable payout ratio.
TXN's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP70.38%
EPS Next 2Y-3.52%
EPS Next 3Y3.25%
TEXAS INSTRUMENTS INC
NASDAQ:TXN (4/26/2024, 7:21:15 PM)
After market: 177.54 +0.06 (+0.03%)177.48
+2.23 (+1.27%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
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Market Cap161.38B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.97% |
Dividend Growth(5Y)
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Div Incr Years
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Surprises & Revisions
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EPS NQ rev (3m)
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EPS NY rev (3m)
Revenue NQ rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.14 | ||
| Fwd PE | 34.62 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)5.3
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.02% | ||
| ROE | 38.32% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 41.85% | ||
| PM (TTM) | 36.96% | ||
| GM | 62.9% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.54
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.63 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 4.55 | ||
| Quick Ratio | 3.35 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-24.73%
EPS 3Y6.71%
EPS 5Y
EPS growth Q2Q
EPS Next Y-27.39%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-12.53%
Revenue growth 3Y6.6%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
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FCF growth 3Y
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