Our 10 Best Semiconductor Stocks to Buy for the Next Decade ranks durable franchises using weighted sentiment, business resilience and valuation. Two names raise a separate income question: how much can shareholders collect without relying on an uninterrupted boom? Broadcom Inc. (NASDAQ:AVGO) has stronger recent dividend coverage. Texas Instruments Incorporated (NASDAQ:TXN) pays the higher yield.
Texas Instruments declared a $1.52 quarterly dividend on October 15. Annualizing it produces $6.08 per share, or 2.20% at October 16’s $276.48 close. Broadcom’s $0.65 quarterly payment annualizes to $2.60, a 0.79% yield at $328.75.
Photo from Texas Instruments website
The larger check leaves less breathing room
For the twelve months ended June 30, Texas Instruments generated $8.667 billion of operating cash and spent $3.312 billion on capital assets. The $5.355 billion difference covered $5.112 billion of dividends just 1.05 times. Its reported $6.534 billion free cash flow also includes $1.179 billion of CHIPS Act proceeds; excluding those separate proceeds clarifies the funding comparison. Operating cash still includes $433 million of investment-tax-credit benefits, so the residual is not subsidy-free.
The new dividend raises the hurdle. Holding the recent 913.25 million shares constant, $6.08 annually would cost $5.553 billion. At unchanged capital spending, operating cash would need to reach $8.865 billion, 2.3% above the trailing result, to cover that bill without separate capital-incentive proceeds. That is a manageable improvement, but it has yet to be earned.
Broadcom generated $32.950 billion of operating cash during the nine months ended August 2. After $1.013 billion of capital expenditure, $31.937 billion covered $9.281 billion of dividends 3.44 times. The periods differ; the comparison is coverage within each period, not annual cash totals.
Coverage can absorb a setback, but it cannot price the stock
As a simple stress test, cut each company’s operating cash by 20%, hold capital spending and historical dividends fixed, and coverage falls to 0.71 times for Texas Instruments versus 2.73 for Broadcom.
Texas Instruments’ industrial and automotive exposure offers a recovery route, while its manufacturing investment can support future production. Weak utilization would delay that payoff. Broadcom benefits from AI chips and infrastructure software, but financing commitments and customer concentration compete with distributions for financial flexibility. Our separate analysis examines the obligations behind Broadcom’s customer backstop.
Insider Monkey’s hedge fund database recorded 170 Broadcom hedge-fund holders in Q2 2026, versus 173 in Q1; Texas Instruments rose to 111 from 71. Fisher’s Broadcom shares rose 3%; Fundsmith’s Texas Instruments shares fell 32%. These positions preceded the latest dividend declaration. Broadcom’s September 30 short interest was 54,197,605 shares, 1.16% of float and 2.32 days to cover; that does not identify traders’ motives.
Broadcom has the stronger observed cash cushion; Texas Instruments offers more immediate income. The decisive next evidence is whether Texas Instruments can fund its higher payment after investment without separate capital-incentive proceeds, and whether Broadcom preserves coverage as AI commitments expand. For the separate growth-versus-price decision, our Nvidia-Broadcom comparison tests which AI business justifies its valuation; its October 6 price assumptions are historical. Dividend coverage alone does not establish the better total return.
READ NEXT: Nvidia vs. Broadcom: Which AI Chip Stock Is the Better Buy Now? and How Much Protection Does Micron’s Cash Provide in the Next Downturn?
Hedge Fund Resource Center