Summary: Texas Instruments’s (TXN, Financial) dividend was increased by an impressive 32%. The company has delivered consistent divided increases over the past six years of over 22% per year. The semiconductor company has delivered dividends to its shareholders uninterrupted since 1962, making the firm a Dividend Aristrocrat. The Dallas-based company is the largest producer of analog semiconductors. The quarterly dividend for the November payment will be 50 cents versus the prior year rate of 38 cents per share. The overall yield is 2.12%, just above that of the S&P 500. It ranks 29th among the top 50 technology sector companies in the world paying dividends. The company also released positive quarterly financial results, with its 3rd net income at $968 million (94 cents a share) versus $798 million (76 cents a share) a year earlier. Despite the compelling dividend growth and strong financial rating, the firm does have elevated price-sales (P/S) and price-earnings (P/E) ratios. Texas Instruments does not qualify as a member of our Top 100 Dividend Stock List (see below).
The dividend will be paid at the new higher rate on Nov. 21 to shareholders of record at close of business on Nov. 7. Texas Instruments Inc. is currently priced at $70.73. Listed in the table below are the quarterly dividend payments since 2010.
| Date | Quarterly Dividend |
| Nov. 7 | 50 cents |
| July 28 | 38 cents |
| April 28 | 38 cents |
| Jan. 28 | 38 cents |
| Oct. 28, 2015 | 38 cents |
| July 29, 2015 | 34 cents |
| April 28, 2015 | 34 cents |
| Jan. 28, 2015 | 34 cents |
| Oct. 29, 2014 | 34 cents |
| July 29, 2014 | 30 cents |
| April 28, 2014 | 30 cents |
| Jan. 29, 2014 | 30 cents |
| Oct. 29, 2013 | 30 cents |
| July 29, 2013 | 28 cents |
| April 26, 2013 | 28 cents |
| Jan. 29, 2013 | 21 cents |
| Oct. 31, 2012 | 21 cents |
| July 27, 2012 | 17 cents |
| April 26, 2012 | 17 cents |
| Jan. 27, 2012 | 17 cents |
| Oct. 27, 2011 | 17 cents |
| July 28, 2011 | 13 cents |
| April 28, 2011 | 13 cents |
| Jan. 27, 2011 | 13 cents |
| Oct. 28, 2010 | 13 cents |
| July 28, 2010 | 12 cents |
| April 28, 2010 | 12 cents |
| Jan. 28, 2010 | 12 cents |
Analysis of Texas Instruments Inc. is based upon our five key criteria for the Top 100 list, which include:
| Category | Value | Score |
| Dividend Yield | 2.12% | 272 |
| Dividend Growth (3-6 year avg) | 19.1% | 92 |
| Forward P/E | 21.28 | 226 |
| S&P Financial Rating | A++ | 40 |
| Beta | 1.05 | 150 |
| Total Score | 780 |
Additional information on dividend growth, price-sales (P/S) ratio and historical yield.
| % Yield | 3 Year Div. Growth Rate | 6 Year Div. Growth Rate | SPS 2016 | P/S Ratio | 10 yr P/S Low | 10 yr P/S High | 5 yr max Yield % | 5 yr low Yield % |
| 2.12% | 15.3% | 22.9% | 12.95 | 5.46 | 1.77 | 5.55 | 2.85% | 1.66% |
Final analysis
Positives
- Texas Instruments dividend yield is above that of the S&P 500 Index.
- Texas Instruments maintains a 3-year dividend growth rate of 15.3%.
- Texas Instruments has paid out a dividend consecutively for the past 44 years.
- Texas Instruments maintains a solid investment grade rating.
Negatives
- Texas Instruments is trading at a forward P/E ratio above the market. Additionally, it is also trading at historic highs in regard to P/S ratio. From a relative valuation perspective, Texas Instruments is overvalued.
- Texas Instruments maintains a beta of 1.05, higher than the average company.
- Texas Instruments current dividend yield (2.12%) is below its 5-year average historical dividend yield of 2.20% and max yield of 2.85%.
Based upon its high P/S ratio, high P/E ratio and lower historical yield, Texas Instruments does not qualify as one of our Top 100 Dividend Stocks. However, it remains a viable selection for dividend investors within the tech sector.
Disclosure: I have no position in TXN.
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