What Texas Instruments Capital Strength Means for Its Dividend

Texas Instruments Incorporated (NASDAQ:TXN) is one of the Best Stocks to Buy for Dividends.

What Texas Instruments Capital Strength Means for Its Dividend

A robotic arm in the process of assembling a complex circuit board – showing the industrial scale the company operates at.

The company follows a strong business model centered on analog and embedded processing products, supported by its long-lasting competitive strengths.

Another key part of its strategy to drive long-term growth in free cash flow per share is its disciplined approach to capital allocation. This includes careful selection of research and development projects, building new capabilities, investing in manufacturing capacity, evaluating potential acquisitions, and returning capital to shareholders.

Texas Instruments Incorporated (NASDAQ:TXN)’s strategy also focuses on efficiency, which it defines as consistently aiming to generate greater results for every dollar spent. This approach emphasizes directing investments toward the most impactful areas to support the long-term growth of free cash flow per share, rather than simply cutting costs to the bare minimum. For shareholders, this commitment to efficiency is expected to support revenue growth, stronger gross margins, careful management of R&D and SG&A expenses, healthy free cash flow margins, and ultimately, an increase in free cash flow per share.

Texas Instruments Incorporated (NASDAQ:TXN) currently offers a quarterly dividend of $1.36 per share. Overall, the company has raised its payouts for 21 consecutive years. In the past five years, it has raised its payouts at an annual average rate of over 9%, which is considered a solid pace in the tech sector. As of June 25, TXN has a dividend yield of 2.65%.

While we acknowledge the potential of TXN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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