Assessing the Upcoming Dividend and Historical Performance of TXN
Texas Instruments Inc (TXN, Financial) recently announced a dividend of $1.3 per share, payable on 2024-02-13, with the ex-dividend date set for 2024-01-30. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Texas Instruments Inc's dividend performance and assess its sustainability.
What Does Texas Instruments Inc Do?
Dallas-based Texas Instruments generates over 95% of its revenue from semiconductors and the remainder from its well-known calculators. Texas Instruments is the world's largest maker of analog chips, which are used to process real-world signals such as sound and power. Texas Instruments also has a leading market share position in processors and microcontrollers used in a wide variety of electronics applications.
A Glimpse at Texas Instruments Inc's Dividend History
Texas Instruments Inc has maintained a consistent dividend payment record since 1985, with dividends currently distributed on a quarterly basis. Moreover, Texas Instruments Inc has increased its dividend each year since 1998, earning it the prestigious title of a dividend aristocrat. Below is a chart showing annual Dividends Per Share to track historical trends.
Breaking Down Texas Instruments Inc's Dividend Yield and Growth
Texas Instruments Inc currently has a 12-month trailing dividend yield of 3.06% and a forward dividend yield of 3.17%, indicating an expectation of increased dividend payments over the next 12 months. Over the past three years, Texas Instruments Inc's annual dividend growth rate was 10.50%, which extends to 13.70% over a five-year horizon. Looking at the past decade, the annual dividends per share growth rate stands at an impressive 18.20%. The 5-year yield on cost for Texas Instruments Inc stock is approximately 5.81%.
The Sustainability Question: Payout Ratio and Profitability
The dividend payout ratio is crucial for assessing the sustainability of a company's dividend. Texas Instruments Inc's dividend payout ratio is currently 0.71, which may suggest potential concerns regarding sustainability. However, Texas Instruments Inc's profitability rank is a robust 9 out of 10, indicating strong earnings relative to its peers. The company has also reported positive net income each year over the past decade, reinforcing its high profitability.
Growth Metrics: The Future Outlook
For dividends to be sustainable, a company must exhibit strong growth metrics. Texas Instruments Inc's growth rank of 9 out of 10 suggests a positive growth trajectory. However, Texas Instruments Inc's revenue growth rate of approximately 7.30% per year over the past three years underperforms 62.36% of global competitors. Its 3-year EPS growth rate of 4.50% per year also underperforms 72.52% of global competitors. Lastly, the 5-year EBITDA growth rate of 8.80% underperforms 67.97% of global competitors.
Next Steps for Investors
In conclusion, while Texas Instruments Inc's dividend payments and growth rates are commendable, the payout ratio and mixed growth metrics warrant a careful analysis of the dividend's sustainability. Investors should consider the company's high profitability rank and historical ability to generate net income as positive indicators. However, it is also essential to weigh these against the company's growth performance relative to its peers. For those seeking high-dividend yield opportunities, GuruFocus Premium offers a High Dividend Yield Screener to discover promising investments.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
