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Texas Instruments Incorporated (TXN)

Company Dividend Discount ModelIndustry: SemiconductorsSector: Technology

Valuation Snapshot

Stable Growth$47.58 - $71.60$58.94
Multi-Stage$75.35 - $82.27$78.75
Blended Fair Value$68.84
Current Price$183.73
Upside-62.53%
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 Rate9.08%9.08%9.08%
Growth Rate-0.17%0.83%1.83%
Fair Value$47.58$58.94$71.60
Upside / Downside-74.10%-67.92%-61.03%

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 Rate9.08%9.08%9.08%
Growth Rate-0.17%0.83%1.83%
Year 1 PV (M)4,454.294,498.914,543.52
Year 2 PV (M)4,007.894,088.594,170.08
Year 3 PV (M)3,605.173,714.593,826.21
Year 4 PV (M)3,241.923,373.793,509.63
Year 5 PV (M)2,914.363,063.283,218.22
PV of Terminal Value (M)50,743.0153,335.8756,033.65
Equity Value (M)68,966.6472,075.0175,301.32
Shares Outstanding (M)915.25915.25915.25
Fair Value$75.35$78.75$82.27
Upside / Downside-58.99%-57.14%-55.22%

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