- 4.7% Revenue Growth over past 3 years
- 27.45% Dividend Growth over past 3 years
- Low D/E (debt to equity ratio) of .28
"The ultimate measure for any enterprise is superior long-term growth
of free cash flow." Rich Templeton Chairman, President and CEO
- Rich Templeton, chairman, president and CEO
Texas Instrument Dividend History
Notice some important points in this chart. The "dot com" crash occurred right at the time TXN started paying out dividends. Yet, they were able to pay and increase.
Then look at 2007 - 2009 when the entire market suffered a major disruption. However, many stocks not only continued their dividends but increased their dividend twice. For an income investor like me, I like that kind of history.
Texas Instrument Yield
On a theoretical basis you need a dividend growth rate of just about 16% for 6 years to obtain the same income you would have if you bought a stock with a 5.3% yield and dividend growth of 2.71% per year like At&t (T) delivers. See the table below.
When I apply the same math to a comparison of At&t and TXN with a lower yield (2.5%) but a much higher dividend growth rate (27.45%) the results are stunning. See the table below.
Texas Instrument all Dividend Machine Fundamentals
My Take
Two types of income investors read this blog. Some need current yield. They make valid arguments for this approach. Other income investors concentrate on dividend growth. They too make valid arguments as to why this is a better strategy.
The decision to buy high yielders versus high growers has many moving parts, your age for instance as well as your personal cash flow cushion.
I like TXN because it does beat the 10 U.S. Treasury but is highly likely to double my income in just a few short years.