TEXAS INSTRUMENTS INC (TXN) Stock Fundamental Analysis
NASDAQ:TXN - Nasdaq - US8825081040 - Common Stock - Currency: USD
Overall TXN gets a fundamental rating of 6 out of 10. We evaluated TXN against 110 industry peers in the Semiconductors & Semiconductor Equipment industry. TXN has an excellent profitability rating, but there are some minor concerns on its financial health. TXN is valied quite expensively at the moment, while it does show a decent growth rate. Finally TXN also has an excellent dividend rating. This makes TXN very considerable for dividend investing!
1. Profitability
1.1 Basic Checks
TXN had positive earnings in the past year.
In the past year TXN had a positive cash flow from operations.
TXN had positive earnings in each of the past 5 years.
Each year in the past 5 years TXN had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 14.36%, TXN belongs to the best of the industry, outperforming 85.45% of the companies in the same industry.
The Return On Equity of TXN (29.54%) is better than 91.82% of its industry peers.
With an excellent Return On Invested Capital value of 15.47%, TXN belongs to the best of the industry, outperforming 90.00% of the companies in the same industry.
TXN had an Average Return On Invested Capital over the past 3 years of 24.88%. This is significantly above the industry average of 11.17%.
The last Return On Invested Capital (15.47%) 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 | 29.54% | ||
| ROIC | 15.47% |
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 30.20%, TXN belongs to the best of the industry, outperforming 91.82% of the companies in the same industry.
TXN's Profit Margin has declined in the last couple of years.
With an excellent Operating Margin value of 34.29%, TXN belongs to the best of the industry, outperforming 93.64% of the companies in the same industry.
TXN's Operating Margin has declined in the last couple of years.
TXN's Gross Margin of 58.02% is amongst the best of the industry. TXN outperforms 83.64% of its industry peers.
TXN's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 34.29% | ||
| PM (TTM) | 30.2% | ||
| GM | 58.02% |
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
TXN has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, TXN has more shares outstanding
The number of shares outstanding for TXN has been reduced compared to 5 years ago.
The debt/assets ratio for TXN is higher compared to a year ago.
2.2 Solvency
TXN has an Altman-Z score of 9.47. This indicates that TXN is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 9.47, TXN is doing good in the industry, outperforming 79.09% of the companies in the same industry.
The Debt to FCF ratio of TXN is 8.83, which is on the high side as it means it would take TXN, 8.83 years of fcf income to pay off all of its debts.
TXN has a Debt to FCF ratio (8.83) which is in line with its industry peers.
A Debt/Equity ratio of 0.78 indicates that TXN is somewhat dependend on debt financing.
TXN has a worse Debt to Equity ratio (0.78) than 80.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 8.83 | ||
| Altman-Z | 9.47 |
ROIC/WACC1.36
WACC11.39%
2.3 Liquidity
TXN has a Current Ratio of 5.26. This indicates that TXN is financially healthy and has no problem in meeting its short term obligations.
With a decent Current ratio value of 5.26, TXN is doing good in the industry, outperforming 78.18% of the companies in the same industry.
A Quick Ratio of 3.37 indicates that TXN has no problem at all paying its short term obligations.
TXN's Quick ratio of 3.37 is fine compared to the rest of the industry. TXN outperforms 65.45% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 5.26 | ||
| Quick Ratio | 3.37 |
3. Growth
3.1 Past
TXN shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -17.78%.
The Revenue has decreased by -4.48% in the past year.
TXN shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.69% yearly.
EPS 1Y (TTM)-17.78%
EPS 3Y-14.28%
EPS 5Y0%
EPS Q2Q%6.67%
Revenue 1Y (TTM)-4.48%
Revenue growth 3Y-5.17%
Revenue growth 5Y1.69%
Sales Q2Q%11.14%
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.
Based on estimates for the next years, TXN will show a quite strong growth in Revenue. The Revenue will grow by 10.68% on average per year.
EPS Next Y7.67%
EPS Next 2Y13.54%
EPS Next 3Y15.72%
EPS Next 5Y18.55%
Revenue Next Year11.77%
Revenue Next 2Y10.99%
Revenue Next 3Y10.79%
Revenue Next 5Y10.68%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
With a Price/Earnings ratio of 35.81, TXN can be considered very expensive at the moment.
The rest of the industry has a similar Price/Earnings ratio as TXN.
The average S&P500 Price/Earnings ratio is at 26.60. TXN is valued slightly more expensive when compared to this.
TXN is valuated quite expensively with a Price/Forward Earnings ratio of 28.20.
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 (22.43), we can say TXN is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.81 | ||
| Fwd PE | 28.2 |
4.2 Price Multiples
TXN's Enterprise Value to EBITDA is on the same level as the industry average.
TXN's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 117.83 | ||
| EV/EBITDA | 24.66 |
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.
TXN's earnings are expected to grow with 15.72% in the coming years. This may justify a more expensive valuation.
PEG (NY)4.67
PEG (5Y)N/A
EPS Next 2Y13.54%
EPS Next 3Y15.72%
5. Dividend
5.1 Amount
TXN has a Yearly Dividend Yield of 2.90%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.41, TXN pays a better dividend. On top of this TXN pays more dividend than 90.91% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, TXN pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.9% |
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 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
100.06% 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.
DP100.06%
EPS Next 2Y13.54%
EPS Next 3Y15.72%
188.71
+0.37 (+0.2%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners90.44%
Inst Owner Change-0.37%
Ins Owners0.23%
Ins Owner Change3.93%
Market Cap171.44B
Analysts66.5
Price Target178.55 (-5.38%)
Short Float %2.24%
Short Ratio2.36
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.9% |
Yearly Dividend5.27
Dividend Growth(5Y)10.46%
DP100.06%
Div Incr Years21
Div Non Decr Years26
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)12.8%
Min EPS beat(2)6.88%
Max EPS beat(2)18.72%
EPS beat(4)4
Avg EPS beat(4)8.73%
Min EPS beat(4)3.53%
Max EPS beat(4)18.72%
EPS beat(8)8
Avg EPS beat(8)6.58%
EPS beat(12)12
Avg EPS beat(12)6.5%
EPS beat(16)15
Avg EPS beat(16)6.94%
Revenue beat(2)2
Avg Revenue beat(2)2.69%
Min Revenue beat(2)2.38%
Max Revenue beat(2)3.01%
Revenue beat(4)2
Avg Revenue beat(4)1.03%
Min Revenue beat(4)-1.01%
Max Revenue beat(4)3.01%
Revenue beat(8)4
Avg Revenue beat(8)0.42%
Revenue beat(12)7
Avg Revenue beat(12)1.28%
Revenue beat(16)10
Avg Revenue beat(16)1.8%
PT rev (1m)-13.55%
PT rev (3m)-13.93%
EPS NQ rev (1m)7.63%
EPS NQ rev (3m)6.92%
EPS NY rev (1m)4.65%
EPS NY rev (3m)1.68%
Revenue NQ rev (1m)4.39%
Revenue NQ rev (3m)4.1%
Revenue NY rev (1m)1.67%
Revenue NY rev (3m)0.98%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.81 | ||
| Fwd PE | 28.2 | ||
| P/S | 10.68 | ||
| P/FCF | 117.83 | ||
| P/OCF | 27.88 | ||
| P/B | 10.45 | ||
| P/tB | 14.55 | ||
| EV/EBITDA | 24.66 |
EPS(TTM)5.27
EY2.79%
EPS(NY)6.69
Fwd EY3.55%
FCF(TTM)1.6
FCFY0.85%
OCF(TTM)6.77
OCFY3.59%
SpS17.67
BVpS18.06
TBVpS12.97
PEG (NY)4.67
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.36% | ||
| ROE | 29.54% | ||
| ROCE | 17.6% | ||
| ROIC | 15.47% | ||
| ROICexc | 18.41% | ||
| ROICexgc | 22.35% | ||
| OM | 34.29% | ||
| PM (TTM) | 30.2% | ||
| GM | 58.02% | ||
| FCFM | 9.07% |
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-Score5
Asset Turnover0.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 8.83 | ||
| Debt/EBITDA | 1.79 | ||
| Cap/Depr | 282.49% | ||
| Cap/Sales | 29.25% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 85.83% | ||
| Profit Quality | 30.02% | ||
| Current Ratio | 5.26 | ||
| Quick Ratio | 3.37 | ||
| Altman-Z | 9.47 |
F-Score5
WACC11.39%
ROIC/WACC1.36
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)-17.78%
EPS 3Y-14.28%
EPS 5Y0%
EPS Q2Q%6.67%
EPS Next Y7.67%
EPS Next 2Y13.54%
EPS Next 3Y15.72%
EPS Next 5Y18.55%
Revenue 1Y (TTM)-4.48%
Revenue growth 3Y-5.17%
Revenue growth 5Y1.69%
Sales Q2Q%11.14%
Revenue Next Year11.77%
Revenue Next 2Y10.99%
Revenue Next 3Y10.79%
Revenue Next 5Y10.68%
EBIT growth 1Y-16.1%
EBIT growth 3Y-16.01%
EBIT growth 5Y-1.25%
EBIT Next Year47.75%
EBIT Next 3Y27.49%
EBIT Next 5Y22.78%
FCF growth 1Y-66.93%
FCF growth 3Y-38.03%
FCF growth 5Y-23.72%
OCF growth 1Y-20.5%
OCF growth 3Y-10.31%
OCF growth 5Y-1.02%