Based on Texas Instruments Incorporated (NASDAQ:TXN)’s recent performance, though, returning more capital to shareholders doesn’t entirely make sense. Quarterly revenues have decreased 4% since Dec. 2012, and its annual revenue has dropped 8% since 2009. One potential reason for the dividend is that Texas Instruments has spare change left over after letting go of more than 500 workers and is trying to get investors excited about the company again. It might seem tempting to jump on this train after the news of the dividend, but it’s wiser for your bank account to wait and see how the company fares following these new changes.
Divi-do’s and don’ts
When a company raises its dividend by a large percentage, it may be too tempting to buy. The truly Foolish investor, however, knows how to identify a strong financial structure from a weak one. The Coca-Cola Company (NYSE:KO) is an easy example of a Dividend Aristocrat guaranteed to pay off, but Texas Instruments Incorporated (NASDAQ:TXN)proves that even if the payout is big, the company might still have some issues to resolve.
Ultimately, if you like a stock but have an apprehension (or several), just wait it out for a while and see how it changes. Mr. Market may fall into a tizzy over moment-to-moment stock twists and turns, but that doesn’t mean investors should.
Fool contributor Caroline Bennett has no position in any stocks mentioned. The Motley Fool recommends Coca-Cola.
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