TEXAS INSTRUMENTS INC (TXN) Stock Fundamental Analysis
USA - NASDAQ:TXN - US8825081040 - Common Stock
177.63 USD
-0.57 (-0.32%)
178.159 USD
+0.53 (+0.3%)
Taking everything into account, TXN scores 6 out of 10 in our fundamental rating. 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 correct valuation and a medium growth rate. Finally TXN also has an excellent dividend rating. These ratings could make TXN a good candidate for dividend investing.
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.
In the past 5 years TXN has always been profitable.
In the past 5 years TXN always reported a positive cash flow from operatings.
1.2 Ratios
TXN has a Return On Assets of 14.36%. This is amongst the best in the industry. TXN outperforms 87.50% of its industry peers.
TXN has a Return On Equity of 30.57%. This is amongst the best in the industry. TXN outperforms 91.07% of its industry peers.
Looking at the Return On Invested Capital, with a value of 15.76%, TXN belongs to the top of the industry, outperforming 91.07% of the companies in the same industry.
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
Looking at the Profit Margin, with a value of 30.07%, TXN belongs to the top of the industry, outperforming 91.96% of the companies in the same industry.
In the last couple of years the Profit Margin of TXN has declined.
TXN has a better Operating Margin (34.89%) than 92.86% of its industry peers.
TXN's Operating Margin has declined in the last couple of years.
With an excellent Gross Margin value of 58.03%, TXN belongs to the best 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 | 34.89% | ||
| 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), TXN is creating value.
TXN has more shares outstanding than it did 1 year ago.
The number of shares outstanding for TXN has been reduced compared to 5 years ago.
TXN has a worse debt/assets ratio than last year.
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.
The Debt to FCF ratio of TXN (9.34) is comparable to the rest of the industry.
TXN has a Debt/Equity ratio of 0.86. This is a neutral value indicating TXN is somewhat dependend on debt financing.
The Debt to Equity ratio of TXN (0.86) is worse than 82.14% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.86 | ||
| Debt/FCF | 9.34 | ||
| Altman-Z | 8.76 |
ROIC/WACC1.4
WACC11.23%
2.3 Liquidity
TXN has a Current Ratio of 5.81. This indicates that TXN is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 5.81, TXN belongs to the top of the industry, outperforming 81.25% of the companies in the same industry.
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.
TXN has a Quick ratio of 3.88. This is in the better half of the industry: TXN outperforms 71.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 5.81 | ||
| Quick Ratio | 3.88 |
3. Growth
3.1 Past
The earnings per share for TXN have decreased by -5.21% in the last year.
TXN shows a small growth in Revenue. In the last year, the Revenue has grown by 3.62%.
TXN shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.69% yearly.
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.
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 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.
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
Based on the Price/Earnings ratio of 32.53, the valuation of TXN can be described as expensive.
Based on the Price/Earnings ratio, TXN is valued a bit cheaper than 65.18% of the companies in the same industry.
When comparing the Price/Earnings ratio of TXN to the average of the S&P500 Index (27.20), we can say TXN is valued inline with the index average.
TXN is valuated quite expensively with a Price/Forward Earnings ratio of 26.32.
TXN's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. TXN is cheaper than 61.61% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of TXN to the average of the S&P500 Index (22.71), we can say TXN is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.53 | ||
| Fwd PE | 26.32 |
4.2 Price Multiples
69.64% of the companies in the same industry are more expensive than TXN, based on the Enterprise Value to EBITDA ratio.
The rest of the industry has a similar Price/Free Cash Flow ratio as TXN.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 107.45 | ||
| EV/EBITDA | 22.15 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates TXN does not grow enough to justify the current Price/Earnings ratio.
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)3.55
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.
Compared to an average industry Dividend Yield of 2.31, TXN pays a better dividend. On top of this TXN pays more dividend than 93.75% of the companies listed 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 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)10.46%
Div Incr Years21
Div Non Decr Years26
5.3 Sustainability
97.71% of the earnings are spent on dividend by TXN. This is not a sustainable payout ratio.
The dividend of TXN is growing, but earnings are growing more, so the dividend growth is sustainable.
DP97.71%
EPS Next 2Y14.04%
EPS Next 3Y15.65%
177.63
-0.57 (-0.32%)
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 Cap161.49B
Analysts68.18
Price Target204.63 (15.2%)
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 | 32.53 | ||
| Fwd PE | 26.32 | ||
| P/S | 9.68 | ||
| P/FCF | 107.45 | ||
| P/OCF | 25.08 | ||
| P/B | 9.85 | ||
| P/tB | 13.69 | ||
| EV/EBITDA | 22.15 |
EPS(TTM)5.46
EY3.07%
EPS(NY)6.75
Fwd EY3.8%
FCF(TTM)1.65
FCFY0.93%
OCF(TTM)7.08
OCFY3.99%
SpS18.34
BVpS18.04
TBVpS12.97
PEG (NY)3.55
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
WACC11.23%
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%