NasdaqGS:TXN

Stock Analysis Report

Executive Summary

Texas Instruments Incorporated designs, manufactures, and sells semiconductors to electronics designers and manufacturers worldwide.

Rewards

PE ratio (23.9x) is below the Semiconductor industry average (34.5x)

Earnings are forecast to grow 2.93% per year

Earnings grew by 10.8% over the past year

Pays a high and reliable dividend of 2.76%

Risk Analysis

Has a high level of debt



Snowflake Analysis

Solid track record established dividend payer.


Similar Companies

Share Price & News

How has Texas Instruments's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TXN has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.3%

TXN

2.5%

US Semiconductor

2.0%

US Market


1 Year Return

32.5%

TXN

46.4%

US Semiconductor

23.5%

US Market

Return vs Industry: TXN underperformed the US Semiconductor industry which returned 48.5% over the past year.

Return vs Market: TXN exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

TXNIndustryMarket
7 Day1.3%2.5%2.0%
30 Day4.2%5.4%4.3%
90 Day1.7%19.2%12.2%
1 Year36.2%32.5%49.3%46.4%26.1%23.5%
3 Year90.5%76.2%94.6%83.7%53.1%43.2%
5 Year172.5%139.2%152.4%127.6%75.5%56.1%

Price Volatility Vs. Market

How volatile is Texas Instruments's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Texas Instruments undervalued compared to its fair value and its price relative to the market?

24.05x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: TXN ($130.67) is trading above our estimate of fair value ($66.82)

Significantly Below Fair Value: TXN is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: TXN is good value based on its PE Ratio (23.9x) compared to the Semiconductor industry average (34.5x).

PE vs Market: TXN is poor value based on its PE Ratio (23.9x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: TXN is poor value based on its PEG Ratio (8.1x)


Price to Book Ratio

PB vs Industry: TXN is overvalued based on its PB Ratio (13.6x) compared to the US Semiconductor industry average (3.3x).


Next Steps

Future Growth

How is Texas Instruments forecast to perform in the next 1 to 3 years based on estimates from 27 analysts?

2.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TXN's forecast earnings growth (2.9% per year) is above the savings rate (1.7%).

Earnings vs Market: TXN's earnings (2.9% per year) are forecast to grow slower than the US market (14.3% per year).

High Growth Earnings: TXN's earnings are forecast to grow, but not significantly.

Revenue vs Market: TXN's revenue (2.4% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: TXN's revenue (2.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TXN's Return on Equity is forecast to be very high in 3 years time (61.5%).


Next Steps

Past Performance

How has Texas Instruments performed over the past 5 years?

15.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TXN has high quality earnings.

Growing Profit Margin: TXN's current net profit margins (34.9%) are higher than last year (29.4%).


Past Earnings Growth Analysis

Earnings Trend: TXN's earnings have grown by 15.3% per year over the past 5 years.

Accelerating Growth: TXN's earnings growth over the past year (10.8%) is below its 5-year average (15.3% per year).

Earnings vs Industry: TXN earnings growth over the past year (10.8%) exceeded the Semiconductor industry -15.8%.


Return on Equity

High ROE: TXN's Return on Equity (57.7%) is considered outstanding.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Texas Instruments's financial position?


Financial Position Analysis

Short Term Liabilities: TXN's short term assets ($8.7B) exceed its short term liabilities ($2.0B).

Long Term Liabilities: TXN's short term assets ($8.7B) exceed its long term liabilities ($7.0B).


Debt to Equity History and Analysis

Debt Level: TXN's debt to equity ratio (64.6%) is considered high.

Reducing Debt: TXN's debt to equity ratio has increased from 44.4% to 64.6% over the past 5 years.

Debt Coverage: TXN's debt is well covered by operating cash flow (121.4%).

Interest Coverage: TXN's interest payments on its debt are well covered by EBIT (36.9x coverage).


Balance Sheet

Inventory Level: TXN has a high level of physical assets or inventory.

Debt Coverage by Assets: TXN's debt is covered by short term assets (assets are 1.5x debt).


Next Steps

Dividend

What is Texas Instruments's current dividend yield, its reliability and sustainability?

2.73%

Current Dividend Yield


Dividend Yield vs Market

company2.7%marketbottom25%1.4%markettop25%3.7%industryaverage2.0%forecastin3Years2.7%

Current dividend yield vs market & industry

Notable Dividend: TXN's dividend (2.76%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: TXN's dividend (2.76%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: TXN's dividends per share have been stable in the past 10 years.

Growing Dividend: TXN's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (56.2%), TXN's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TXN's dividends in 3 years are forecast to be covered by earnings (68.4% payout ratio).


Next Steps

Management

What is the CEO of Texas Instruments's salary, the management and board of directors tenure and is there insider trading?

3.0yrs

Average management tenure


CEO

Rich Templeton (60yo)

1.5yrs

Tenure

US$17,576,224

Compensation

Mr. Richard K. Templeton, also known as Rich, serves as the Chief Executive Officer and President of Texas Instruments Inc. since July 17, 2018. Mr. Templeton joined Texas Instruments Inc. in 1980 in the S ...


CEO Compensation Analysis

Compensation vs Market: Rich's total compensation ($USD17.58M) is above average for companies of similar size in the US market ($USD10.76M).

Compensation vs Earnings: Rich's compensation has been consistent with company performance over the past year.


Management Age and Tenure

3.0yrs

Average Tenure

55yo

Average Age

Experienced Management: TXN's management team is considered experienced (3 years average tenure).


Board Age and Tenure

5.4yrs

Average Tenure

59.5yo

Average Age

Experienced Board: TXN's board of directors are considered experienced (5.4 years average tenure).


Insider Trading

Insider Buying: TXN insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$182,88119 Nov 19
Ahmad R. S. Bahai
EntityIndividual
Role
Chief Technology Officer
Senior VP & CTO
Shares1,550
Max PriceUS$117.99
SellUS$793,06201 Aug 19
Cynthia Trochu
EntityIndividual
Role
Chief Legal Officer
Senior VP
Shares6,185
Max PriceUS$128.22
SellUS$3,344,94029 Jul 19
Bing Xie
EntityIndividual
Shares26,133
Max PriceUS$128.00
SellUS$2,169,02029 Jul 19
Darla Whitaker
EntityIndividual
Shares16,990
Max PriceUS$127.66
SellUS$1,271,10029 Jul 19
Ahmad R. S. Bahai
EntityIndividual
Role
Chief Technology Officer
Senior VP & CTO
Shares10,000
Max PriceUS$127.11
SellUS$6,548,06006 May 19
Niels Anderskouv
EntityIndividual
Role
Senior Key Executive
Senior Vice President of Analog Power Products
Shares56,166
Max PriceUS$117.14
SellUS$1,487,41406 May 19
Haviv Ilan
EntityIndividual
Role
Senior Key Executive
Senior Vice President of Analog Signal Chain
Shares12,659
Max PriceUS$117.50
SellUS$2,335,03201 May 19
Bing Xie
EntityIndividual
Shares20,000
Max PriceUS$116.75
SellUS$17,70319 Feb 19
Ahmad R. S. Bahai
EntityIndividual
Role
Chief Technology Officer
Senior VP & CTO
Shares165
Max PriceUS$107.29
SellUS$922,76214 Feb 19
Bing Xie
EntityIndividual
Shares8,693
Max PriceUS$106.15
SellUS$936,45504 Feb 19
Kyle Flessner
EntityIndividual
Shares9,270
Max PriceUS$101.02
SellUS$1,217,39204 Feb 19
Julie Van Haren
EntityIndividual
Role
Head of Corporate Communications
Senior Vice President of Communications & Investor Relations
Shares12,051
Max PriceUS$101.02
SellUS$2,341,03704 Feb 19
Niels Anderskouv
EntityIndividual
Role
Senior Key Executive
Senior Vice President of Analog Power Products
Shares23,174
Max PriceUS$101.02
SellUS$145,20304 Feb 19
Ellen Barker
EntityIndividual
Role
Chief Information Officer
Senior VP of IT Services & Chief Information Officer
Shares1,435
Max PriceUS$101.19
SellUS$2,341,03704 Feb 19
Haviv Ilan
EntityIndividual
Role
Senior Key Executive
Senior Vice President of Analog Signal Chain
Shares23,174
Max PriceUS$101.02
SellUS$3,371,13804 Feb 19
R. Delagi
EntityIndividual
Role
Senior Key Executive
Senior Vice President
Shares33,371
Max PriceUS$101.02
SellUS$601,65804 Feb 19
Darla Whitaker
EntityIndividual
Shares5,960
Max PriceUS$100.95
SellUS$702,39204 Feb 19
Cynthia Trochu
EntityIndividual
Role
Chief Legal Officer
Senior VP
Shares6,953
Max PriceUS$101.02
SellUS$283,36101 Feb 19
Hagop Kozanian
EntityIndividual
Shares2,805
Max PriceUS$101.02
SellUS$2,206,51530 Jan 19
Bing Xie
EntityIndividual
Shares21,337
Max PriceUS$103.41
SellUS$1,042,25230 Jan 19
Ahmad R. S. Bahai
EntityIndividual
Role
Chief Technology Officer
Senior VP & CTO
Shares10,034
Max PriceUS$104.54

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Rich Templeton (60yo)

    Chairman

    • Tenure: 1.5yrs
    • Compensation: US$17.58m
  • Ahmad R. S. Bahai (56yo)

    Senior VP & CTO

    • Tenure: 2yrs
  • Greg Delagi (56yo)

    Senior Vice President

    • Compensation: US$5.61m
  • Ellen Barker (56yo)

    Senior VP of IT Services & Chief Information Officer

    • Tenure: 5.7yrs
  • Niels Anderskouv (49yo)

    Senior Vice President of Analog Power Products

    • Tenure: 3yrs
    • Compensation: US$5.89m
  • Dave Pahl

    Head of Investor Relations & VP

    • Tenure: 5.4yrs
  • Haviv Ilan (50yo)

    Senior Vice President of Analog Signal Chain

    • Tenure: 5.3yrs
    • Compensation: US$5.85m
  • Cynthia Trochu (55yo)

    Senior VP

    • Tenure: 4.4yrs
  • Julie Van Haren (50yo)

    Senior Vice President of Communications & Investor Relations

    • Tenure: 3yrs
  • Rafael Lizardi (46yo)

    Senior VP of Finance & Operations

    • Tenure: 2.9yrs
    • Compensation: US$4.19m

Board Members

  • Rich Templeton (60yo)

    Chairman

    • Tenure: 1.5yrs
    • Compensation: US$17.58m
  • Carrie Cox (61yo)

    Independent Director

    • Tenure: 15.3yrs
    • Compensation: US$300.28k
  • Janet Clark (64yo)

    Independent Director

    • Tenure: 4.5yrs
    • Compensation: US$314.93k
  • Pam Patsley (62yo)

    Lead Director

    • Tenure: 0.8yrs
    • Compensation: US$330.76k
  • Ron Kirk (65yo)

    Independent Director

    • Tenure: 6.3yrs
    • Compensation: US$304.39k
  • Robert Sanchez (54yo)

    Independent Director

    • Tenure: 8.8yrs
    • Compensation: US$301.60k
  • Todd Bluedorn (55yo)

    Independent Director

    • Tenure: 2.8yrs
    • Compensation: US$284.93k
  • Mark Blinn (57yo)

    Independent Director

    • Tenure: 6.9yrs
    • Compensation: US$336.60k
  • Martin Craighead (59yo)

    Independent Director

    • Tenure: 1.5yrs
    • Compensation: US$265.54k
  • Jean Hobby (58yo)

    Independent Director

    • Tenure: 3.5yrs
    • Compensation: US$304.93k

Company Information

Texas Instruments Incorporated's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Texas Instruments Incorporated
  • Ticker: TXN
  • Exchange: NasdaqGS
  • Founded: 1930
  • Industry: Semiconductors
  • Sector: Semiconductors
  • Market Cap: US$121.670b
  • Shares outstanding: 934.78m
  • Website: https://www.ti.com

Number of Employees


Location

  • Texas Instruments Incorporated
  • 12500 TI Boulevard
  • Dallas
  • Texas
  • 75243
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TIIXTRA (XETRA Trading Platform)YesCommon StockDEEURJan 1968
TXNNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJan 1968
TXNSWX (SIX Swiss Exchange)YesCommon StockCHCHFJan 1968
TIIDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
TXN *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
0R2HLSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
TXNSNSE (Santiago Stock Exchange)YesCommon StockCLUSDJan 1968
TXN-UETLX (Eurotlx)YesCommon StockITEURJan 1968
TXNWBAG (Wiener Boerse AG)YesCommon StockATEURJan 1968
TXNBASE (Buenos Aires Stock Exchange)CEDEAR EACH 5 REP 1 ORD USD1ARARSSep 2000
TEXA34BOVESPA (Bolsa de Valores de Sao Paulo)EACH BDR REPR 1 COM USD1BRBRLAug 2015

Biography

Texas Instruments Incorporated designs, manufactures, and sells semiconductors to electronics designers and manufacturers worldwide. It operates in two segments, Analog and Embedded Processing. The Analog segment offers power products to manage power requirements in various levels using battery management solutions, portable components, power supply controls, point-of-load products, switches and interfaces, integrated protection devices, high-voltage products, and mobile lighting and display products. This segment also provides signal chain products that sense, condition, and measure signals to allow information to be transferred or converted for further processing and control for use in amplifier, data converter, interface product, motor drive, clock, and sensing product end-markets; and integrated analog and standard products, which are primarily for sale into personal electronics, industrial, and automotive markets. The Embedded Processing segment offers connected microcontrollers, such as microcontrollers, microcontrollers with integrated wireless capabilities, and stand-alone wireless connectivity solutions that are used in electronic equipment to sense, connect, log, and transfer data; digital signal processors for mathematical computations; and applications processors for specific computing activity. This segment offers products for use in various markets, principally industrial and automotive. The company also provides DLP products, primarily for use in projectors to create high-definition images; calculators; and application-specific integrated circuits. Texas Instruments Incorporated markets and sells its semiconductor products through direct sales and distributors, as well as online. The company was founded in 1930 and is headquartered in Dallas, Texas. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/01/17 23:39
End of Day Share Price2020/01/17 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.