Definitive Analysis
Definitive Analysis

Financial Statements

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Ticker

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Texas Instruments Incorporated (TXN)

Company Dividend Discount ModelIndustry: SemiconductorsSector: Technology

Valuation Snapshot

Stable Growth$43.70 - $64.31$53.59
Multi-Stage$66.54 - $72.55$69.49
Blended Fair Value$61.54
Current Price$183.73
Upside-66.50%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS9.77%13.74%5.244.984.694.253.743.292.792.301.801.58
YoY Growth--5.22%6.05%10.58%13.43%13.90%17.73%21.44%27.83%13.99%9.15%
Dividend Yield--2.92%2.88%2.52%2.31%1.98%3.29%2.57%2.21%2.23%2.75%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)5,043.00
(-) Cash Dividends Paid (M)4,949.00
(=) Cash Retained (M)94.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)1,008.60630.38378.23
Cash Retained (M)94.0094.0094.00
(-) Cash Required (M)-1,008.60-630.38-378.23
(=) Excess Retained (M)-914.60-536.38-284.23
(/) Shares Outstanding (M)915.25915.25915.25
(=) Excess Retained per Share-1.00-0.59-0.31
LTM Dividend per Share5.415.415.41
(+) Excess Retained per Share-1.00-0.59-0.31
(=) Adjusted Dividend4.414.825.10
WACC / Discount Rate9.90%9.90%9.90%
Growth Rate-0.17%0.83%1.83%
Fair Value$43.70$53.59$64.31
Upside / Downside-76.22%-70.83%-65.00%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)5,043.005,084.935,127.215,169.845,212.835,256.175,413.86
Payout Ratio98.14%96.51%94.88%93.25%91.63%90.00%92.50%
Projected Dividends (M)4,949.004,907.414,864.784,821.114,776.374,730.565,007.82

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.90%9.90%9.90%
Growth Rate-0.17%0.83%1.83%
Year 1 PV (M)4,420.974,465.264,509.54
Year 2 PV (M)3,948.164,027.664,107.94
Year 3 PV (M)3,524.883,631.873,741.00
Year 4 PV (M)3,146.023,273.983,405.80
Year 5 PV (M)2,806.992,950.433,099.66
PV of Terminal Value (M)43,053.1045,253.0347,541.97
Equity Value (M)60,900.1463,602.2266,405.92
Shares Outstanding (M)915.25915.25915.25
Fair Value$66.54$69.49$72.55
Upside / Downside-63.78%-62.18%-60.51%

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