Tuesday, December 15, 2015

Recent Transfer: Texas Instruments, Inc.


Texas Instruments, Inc. (NASDAQ:TXN) designs, makes and sells semiconductors to electronics designers and manufacturers worldwide. The company operates mainly through two segments, Analog and Embedded Processing. It markets and sells products through a direct sales force and through distributors. TXN was founded in 1930 and is headquartered in Dallas, Texas.

TXN is a Dividend Contender with a 12-year streak of annual dividend increases. The company pays quarterly dividends of 38¢ per share in the months of February, May, August and November. At the current price of about $58, the stock yields 2.62%.

TXN is the 9th stock that I'm transferring from my portfolio at Scottrade to DivGro. So far, I've transferred Coca Cola (NYSE:KO), Proctor & Gamble (NYSE:PG), Kimberly-Clark (NYSE:KMB), AbbView (NYSE:ABBV), Dominion Resources (NYSE:D), W.P. Carey (NYSE:WPC), Toronto-Dominion Bank (NYSE:TD) and Pfizer (NYSE:PFE).

In the process, I've added $788.53 to DivGro's projected annual dividend income and $1,129.52 in past dividends to DivGro's total dividend tally.

Transactions
2013-09-16 Bought: 50 shares of TXN at $40.55 per share: $ 2,027.47
2013-11-18 Dividend on 50 shares at 30¢ per share:  $ 15.00
2014-02-10 Dividend on 50 shares at 30¢ per share: $ 15.00
2014-05-19 Dividend on 50 shares at 30¢ per share:  $ 15.00
2014-08-18 Dividend on 50 shares at 30¢ per share:  $ 15.00
2014-11-17 Dividend on 50 shares at 34¢ per share:  $ 17.00
2015-02-09 Dividend on 50 shares at 34¢ per share:  $ 17.00
2015-05-18 Dividend on 50 shares at 34¢ per share:  $ 17.00
2015-08-17 Dividend on 50 shares at 34¢ per share:  $ 17.00
2015-11-16 Dividend on 50 shares at 38¢ per share:  $ 19.00
2015-11-16Bought: 10 shares of TXN at $56.72 per share: $ 567.20
                                                                
 Total Capital Invested $ 2,594.67

Total Dividends Received:$ 147.00

With this transfer, DivGro's projected annual dividend income increases by $91.20.

The following chart shows a 3-year history of TXN's share price and indicates when I bought shares.
Note that I routinely include commissions in transactions, whereas the chart shows the share price without commissions.

Source: Scottrade

With an annualized total return of 22%, my TXN investment has done quite well so far.


Why TXN?


Here are some reasons I like TXN and why I decided to transfer the shares to DivGro:
  1. TXN has a 10-year dividend growth rate of 30.1%, although the most recent dividend increase was more modest at 15.9%. That's still a great dividend increase!
  2. At a share price of $58, the stock yields 2.62%. 
  3. The company is the world's largest analog chipmaker and a key supplier of embedded chips for a variety of applications. 
  4. Morningstar assigns TXN a wide economic moat rating, mainly for its analog engineering talent.
  5. In acquiring manufacturing equipment at pennies on the dollar, TXN is retaining cash that could ultimately be distributed to shareholders. . 
Do you own shares of TXN? Do you think TXN is a good dividend growth prospect? Please share your comments below.

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