Updated April 2025
In a world where the tech sector often feels like a rollercoaster ride of hype and volatility, Texas Instruments stands out by doing something refreshingly boring—it consistently pays, and grows, its dividend. And that’s exactly why income-focused investors keep coming back to it.
This isn’t a company chasing headlines or chasing fads. Texas Instruments has been building semiconductors since before it was cool—going back to 1930, in fact. Today, it’s still quietly supplying essential analog and embedded chips that are the backbone of everyday electronics. You’ll find their components in factory automation systems, medical devices, and cars. These aren’t splashy sectors, but they’re steady—and that reliability has made TXN a favorite for long-term dividend portfolios.
Let’s break down what’s happening with the business now, and more importantly, what the dividend looks like going forward.
Recent Events
The start of 2024 brought a mixed bag. Revenue dipped slightly, down about 1.7% year-over-year. Earnings fell harder—down 12.1%—as some of the company’s key markets, like industrial and automotive, went through a rough patch. Inventory buildups and softer demand played a role, and those effects might hang around a bit longer.
But if you’ve followed Texas Instruments for a while, you know these cycles are par for the course. The company tends to play the long game, reinvesting heavily during the slowdowns to be ready for the next wave of demand. That’s exactly what’s happening now. TXN is putting serious capital into expanding its U.S.-based manufacturing capabilities. While that hits short-term cash flows, it’s a smart move for long-term competitiveness—and for the staying power of the dividend.
The stock itself has pulled back from its highs. As of now, shares are trading around $178, well off the $220 peak from the past year. That’s brought the dividend yield up to levels not seen in some time, making it more appealing for investors looking for income rather than fast growth.
Key Dividend Metrics
🟢 Forward Yield: 3.06%
📈 5-Year Average Yield: 2.63%
💸 Trailing 12-Month Dividend: $5.26 per share
🧾 Payout Ratio: 101.15%
🔁 Dividend Growth Streak: 20 consecutive years
💪 Current Ratio: 4.12
📉 Free Cash Flow (ttm): -$583.75M
Dividend Overview
With a forward yield of just over 3%, TXN is offering a more generous payout than usual. It’s currently sitting well above its five-year average, and that’s the kind of spread that tends to catch the eye of dividend investors.
The company’s dividend track record is rock solid. But the payout ratio—now above 100%—is worth a closer look. Normally, that would raise red flags. Yet in TXN’s case, this seems more like a temporary anomaly rather than a sign of danger. The business is investing heavily in growth infrastructure, and profits have dipped a bit in the short term. That’s skewing the numbers.
What keeps this from being a concern is the balance sheet. The company is sitting on over $7.5 billion in cash and carries a current ratio above 4. That kind of liquidity offers breathing room. Even with about $14 billion in total debt, TXN isn’t overleveraged, and it has the flexibility to keep rewarding shareholders even when free cash flow turns negative temporarily.
They’ve done this before. Texas Instruments has a long history of prioritizing capital returns—dividends and buybacks—without putting the business at risk. For income-focused investors, that’s what separates a good dividend payer from a great one.
Dividend Growth and Safety
One of the most impressive things about TXN is not just that it pays a dividend, but how fast that dividend has grown. Over the past decade, the company has been increasing its dividend at a compound annual rate of about 17%. That kind of growth is rare, especially in the tech space.
Even in the last five years, they’ve kept the growth coming. The latest increase brought the quarterly dividend to $1.36 per share—another year of raises added to the 20-year streak. That kind of consistency puts TXN among the most reliable names in the market when it comes to returning cash to shareholders.
Still, it’s important to be realistic. The payout ratio being above 100% tells us the dividend is currently a bit out of sync with earnings. But Texas Instruments doesn’t run its dividend policy off a single year’s profit. They look at long-term free cash flow—and on that front, they’ve generally been strong.
Even with negative levered free cash flow showing up recently, operating cash flow is still north of $6 billion over the past 12 months. That provides some cushion. And given the company’s careful financial management, it’s unlikely they’ll jeopardize their dividend record over a short-term dip.
Safety-wise, this isn’t a perfect setup, but it’s also far from risky. TXN has a long view, and that approach has helped it maintain and grow its dividend through all kinds of market conditions.
Chart Analysis
The past twelve months for TXN tell a clear story: a steady climb through the spring and summer, followed by a gradual shift into weakness that’s now stretching into early April. This chart isn’t about sharp volatility or erratic moves—it’s more a case of momentum quietly fading and technical signals cooling off.
Price Behavior and Moving Averages
From April through July of last year, the price built a strong uptrend, pushing through $200 and holding those levels for a while. That uptrend was supported by a rising 50-day moving average, which crossed well above the 200-day line by midsummer. For a while, the stock rode that technical strength comfortably.
But things started to shift in late fall. The 50-day moving average lost its upward momentum and began to slope downward. As we moved through the first quarter of this year, that line crossed back below the 200-day average—commonly viewed as a sign of sustained weakness setting in.
That crossover, paired with lower highs in price action and increased choppiness, paints a picture of distribution—when investors begin easing out of positions rather than adding. The price has now slipped below both moving averages, and rallies have struggled to hold traction.
Volume and Participation
Looking at the volume beneath the price chart, there’s no obvious spike of panic selling, but there is a subtle increase in turnover on down days, especially in February and late March. That tells us sellers are starting to take control during weakness, even if there’s no broad capitulation just yet.
What’s also noticeable is how volume hasn’t surged on bounce attempts. That signals lackluster conviction behind buying efforts. Without strong volume support, rallies remain suspect and short-lived.
Relative Strength Index (RSI)
The RSI adds a helpful layer here. Over the past year, it’s oscillated in fairly normal ranges, but what stands out is how frequently it dipped into the 30–40 range since December—territory that reflects growing bearish pressure without full-on oversold extremes.
In recent weeks, RSI has lifted off the lows and is hovering in neutral territory, around the 50 mark. This suggests a pause rather than a reversal, and it aligns with the chart’s broader message: price may be searching for a new base but hasn’t found it yet.
Recent Candle Action
Looking at the most recent five candles, there’s a mix of lower wicks and shorter bodies, signaling indecision. Buyers are stepping in at the lows, but they’re not pushing prices meaningfully higher. One candle shows a long upper wick—an attempt to rally that quickly got rejected. That’s often a clue that sellers are still in control, stepping in at the first sign of strength.
What we’re seeing is a market trying to stabilize, but not with a lot of urgency behind it. Until we see stronger closes above the 50-day average—and more convincing volume—it’s tough to say that momentum is shifting back.
Overall Tone
The bigger takeaway here isn’t one of collapse, but rather a cooling-off phase after a strong stretch in 2023. There’s no sign of panic selling, but there’s also no clear demand pushing things higher. If anything, the chart suggests a period of digestion, where the stock is moving sideways to lower, possibly setting up a longer-term base.
Patience will be key. The signals here suggest the stock is still working through a reset phase, one that will take time before real momentum builds again.
Balance Sheet Analysis
Texas Instruments continues to show why it’s one of the more financially grounded players in the semiconductor space. Over the past year, total assets climbed to just over $35.5 billion, up from $32.3 billion the year before. That’s not a fireworks display of growth, but it’s a solid move in the right direction. Equity held steady at roughly $16.9 billion, while liabilities bumped up to $18.6 billion—reflecting the company’s ongoing investments in capacity and infrastructure. You’ll notice total debt has risen to $13.6 billion, a decent jump from last year’s $11.2 billion. But here’s the thing: with nearly $11.4 billion in working capital and a healthy liquidity profile, the company isn’t sweating that debt.
Digging into the details, tangible book value is sitting just above $12.2 billion, and net tangible assets are holding close behind. What stands out is that even with more leverage on the books, net debt remains manageable at around $10.4 billion. This isn’t a company mortgaging the future to chase trends—it’s strategically expanding while keeping its financial core intact. If balance sheets were judged like Olympic routines, this one might not get a perfect 10 for excitement, but it’d definitely score high on execution and stability. And for a company paying out steadily rising dividends? That’s exactly the kind of financial posture you want to see.
Cash Flow Statement
Texas Instruments is still generating healthy operating cash flow, pulling in $6.3 billion over the trailing twelve months. That’s slightly down from the prior two years, but still a strong figure considering the cyclical pressure in the broader semiconductor space. Capital expenditures, however, have continued to climb, hitting nearly $4.8 billion—another sign of the company’s long-term investment in manufacturing capacity. Free cash flow has narrowed to $1.5 billion, a notable drop from previous years, but not unexpected given the scale of expansion underway.
On the financing side, the company continues to return capital while selectively using debt. TXN raised just under $3 billion in new debt and repaid a modest $600 million, while also spending nearly $1 billion on share repurchases. Dividend payments are baked into that financing activity, but what’s telling is that the cash position still stands at $3.2 billion—slightly higher than last year. It’s clear they’re walking a financial tightrope with purpose: investing heavily in future capacity while keeping shareholder returns a priority.
Analyst Ratings
📉 Texas Instruments has been the subject of varied analyst opinions recently, reflecting the dynamic nature of the semiconductor industry. As of now, the stock has a consensus rating of “Hold” from 22 analysts: 8 recommend buying, 12 suggest holding, and 2 advise selling. The average price target stands at $209.20, indicating a potential upside of approximately 17.53% from the current price of $177.99.
📈 In March 2025, one major bank named Texas Instruments a top stock pick. Despite a recent downturn in analog chip demand within the automotive and industrial sectors, analysts expressed optimism about the company’s near-term setup. Inventory levels were noted to be low, and projections showed a potential 70% earnings per share growth by the second half of 2026, hinting at a sales recovery on the horizon. This bullish sentiment supported the firm’s upgraded “Buy” rating on the stock.
⚠️ On the flip side, back in January 2025, the company delivered a disappointing profit forecast that sent the stock tumbling over 7% in a single day. The drop, down to around $185.52, placed it among the weakest performers in its segment at the time. Analysts pointed to challenges in the automotive and industrial sectors, as well as concerns over high spending and elevated inventory levels. Still, some remained hopeful, noting that the company’s investments in higher-margin chip production could pay off over the long run.
📊 The contrasting analyst takes really highlight how split the street is on Texas Instruments right now. While there’s clear caution tied to near-term demand softness, the longer-term view remains supported by the company’s strategic capital investments and its historically consistent execution.
Earning Report Summary
A Slight Beat, But Some Soft Spots
Texas Instruments wrapped up the fourth quarter of 2024 with revenue landing at $4.01 billion. That’s a bit lower than the same time last year but just enough to edge past what many were expecting. Earnings per share came in at $1.30, also down from a year ago, but again—better than predicted. So, while it wasn’t a blowout quarter, there were a couple of solid takeaways that gave investors something to hang onto.
That said, the story wasn’t all that upbeat. Net income slipped compared to the prior year, and some key markets like automotive and industrial didn’t exactly shine. Still, the company did manage to keep things steady in the face of some headwinds, and that says something about its ability to weather these slowdowns.
A Cautious Look Ahead
Looking at the start of 2025, the company is keeping its expectations on the lower end. They’re guiding revenue between $3.74 and $4.06 billion and earnings per share between $0.94 and $1.16. That came in lighter than many had hoped for, and you could almost hear the market hold its breath. Shares slipped nearly 4% after hours when those numbers hit.
The caution makes sense though. Those same automotive and industrial markets are still feeling pressure, and Texas Instruments isn’t the only chipmaker seeing it. But it’s not all gloomy—personal electronics and communication gear are starting to show some signs of life, which could be a spark for future growth.
Holding Steady, Looking for a Turn
For a company that had seen its stock climb around 20% over the past year, this latest update was more of a tap on the brakes than a full stop. It wasn’t bad news, but it wasn’t the kind of upside surprise that lights up a stock either. Right now, it feels like the company is in a wait-and-see mode—still solid, still generating cash, but waiting for those key markets to turn a corner. And if they do, Texas Instruments is positioned to take advantage of it.
Management Team
Texas Instruments is guided by a leadership team that brings a mix of deep industry expertise and a steady hand at the wheel. Haviv Ilan, the company’s President and CEO, took the reins in 2023 after years of climbing the ranks within TI. His career began with the acquisition of Butterfly, a startup he was part of, and over the years, he’s taken on a variety of leadership roles across TI’s analog and embedded processing divisions. His technical background and operational insight make him a grounded and pragmatic leader, especially during a time when the chip industry is anything but predictable.
Rafael Lizardi, the CFO, has been with TI since 2001 and brings a solid understanding of both finance and the semiconductor business. He’s spent time in planning, controlling, and corporate finance roles, helping shape the company’s disciplined capital allocation strategy. CTO Ahmad Bahai rounds out the senior leadership trio, bringing decades of engineering and research experience to TI’s innovation efforts. His work ensures the company stays ahead in analog technologies, even if it doesn’t always make the biggest splash in tech headlines.
Valuation and Stock Performance
As of early April 2025, shares of Texas Instruments are trading around $178, which is down from their 52-week high of just over $220 but still above the lows of about $159. The price action over the past year reflects not only the volatility in tech and semiconductors but also the shifting investor sentiment as earnings moderated and demand in some of TI’s core markets cooled off.
The valuation tells a bit of a story on its own. With a trailing P/E ratio of 34.2 and a forward P/E around 31.6, TXN isn’t exactly trading at a bargain. It’s commanding a bit of a premium, which may be due to its consistent dividend profile and reputation as a steady hand in the chip space. Compared to peers, it’s less flashy on growth but more consistent in return of capital—especially with that 3%+ dividend yield.
With a market cap hovering near $162 billion, the company has serious scale. The dividend continues to be a major draw, now sitting at $5.44 annually per share. And while free cash flow has dipped due to increased capex, the company has shown a long-term ability to self-fund and manage through cycles without compromising shareholder returns.
Risks and Considerations
There are a few things that investors need to keep an eye on with Texas Instruments. The biggest is the cyclical nature of its markets. When customers start trimming inventories or when broader economic demand slows, TI feels it. That’s part of the game with industrial and automotive chip demand—it ebbs and flows, and it’s doing a bit of ebbing right now.
Then there’s the global angle. Like most chipmakers, Texas Instruments operates across international borders. That means it’s exposed to geopolitical tensions, trade policies, and export controls that can shift quickly. Any changes in U.S.–China relations or regulatory pressure on semis can ripple through the company’s operations or customer base.
Tech innovation is another key consideration. Even though TI plays in the analog space, where speed of change isn’t as breakneck as digital or AI chips, there’s still pressure to innovate. They have to invest continuously in R&D to hold their ground against nimble competitors, and that costs real money. If they fall behind in performance or efficiency, it’s not hard for customers to explore other options.
And of course, macroeconomics matter. A global slowdown, tighter monetary policy, or shrinking capital budgets across manufacturing and automotive customers could dampen chip demand and lead to more sluggish financials in the near term.
Final Thoughts
Texas Instruments may not be the buzziest name in semiconductors, but there’s something to be said for consistency. It’s a business that knows its core markets and sticks to what it does best—delivering dependable chips and rewarding shareholders steadily along the way.
Leadership is experienced and focused, not easily swayed by short-term noise. The financials remain solid, even with some recent softness in demand. And while there are headwinds to keep an eye on, this is a company that’s shown it can navigate the ups and downs of the cycle without losing its footing.
As the semiconductor landscape continues to evolve, the key for Texas Instruments will be balancing reinvestment in growth with its tradition of steady cash returns. If they can maintain that balance, it’ll likely continue to be a core name in long-term equity portfolios for years to come.