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Monday, July 25, 2022

Why Texas Instruments Is A Buy For Dividend Growth Investors

I consider Texas Instruments (TXN) one of the best dividend growth stocks to own. 

The company pays a generous dividend yielding 2.76% at $164 per share and has a stellar track record of dividend growth and share buybacks. While I expect a lower dividend growth rate of 10-12% going forward, that rate still easily outpaces the current rate of inflation, especially when reinvesting dividends. 

Texas Instruments has a great management team focused on growing free cash flow as the primary driver of long-term value. The team is disciplined in allocating capital and is a top performer when measured by returns on invested capital. The company is well-positioned to benefit from a rapidly growing semiconductor industry, especially in the industrial and automotive markets in which the company leads with market share in analog and embedded systems.

Evidence of TXN's shareholder-friendly policy over many years is dividend growth of 25% CAGR and a share count reduction of 46% since 2004!
 
To learn why I rate TXN a buy, please read this article at Seeking Alpha.


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