Texas Instruments (TXN) - Get Report has rewarded investors with a solid rally this year and the chip supplier has even more upside largely due to its attractive end-markets and capital allocation strategies.

Texas Instruments shares could reach $100 over the next two years, wrote RBC Capital Markets analyst Amit Daryanani in a Sunday note. Daryanani also raised the price target to $80 from $75.

Shares closed down 0.4% Monday afternoon to $70.00, having risen 27% since January.

The Dallas-based semiconductor designer and manufacturer remains well-positioned to generate mid-to-high single digit growth thanks to its strong end markets, Daryanani noted, adding that the company's roll-out of DMOS6 and RFAB chip manufacturing facilities should also bode well in the near-term.

Long-term catalysts for TI include its diversified revenue stream and solid track record of capital allocation.

For instance, nearly 50% of the company's revenues come from non-tech verticals including industrial and automotive. Industrial end markets contribute to about 31% of TI's overall revenue while automotive makes up approximately 15% of its revenue. Tech-focused verticals include personal electronics, communications equipment and enterprise systems.

Texas Instruments has also returned over 100% of its free cash flow back to investors over the last few years, having offered about 50% of trailing-four-year-average cash flow through dividends. It has also repurchased $2.4 billion of shares on average annually over the last five years, the analyst wrote.

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TI has historically been disciplined on the M&A front, but will be a logical consolidator long-term. It's been quiet during the latest wave of consolidation, but the chip supplier also has history of going after big, needle-moving acquisitions rather than tuck-ins.

Its peer Analog Devices (ADI) - Get Report was the latest to make a move by agreeing last month to pay about $14.8 billion to acquire Linear Technology (LLTC) . The tie-up is bringing together the fifth-largest analog chipmaker with ninth-biggest. Texas Instruments currently remains the biggest player in analog with estimated 18% market share, followed closely by NXP Semiconductors (NXPI) - Get Report with about 13%.

TI's last major acquisition was in 2011 when it acquired National Semiconductor for $6.5 billion.

Overall, TI has been rewarding investors this year by demonstrating strong execution. It solidly beat estimates of second-quarter earnings in July by posting $3.27 billion in revenue and 76 cents in earnings per share. Wall Street was anticipating $3.2 billion in revenue and 72 cents in EPS.

The chip supplier has ample opportunity to drive continued cash flow growth thanks to its strong exposure to the automotive and industrial end-markets, wrote Oppenheimer analyst Rick Schafer in a recent note, highlighting the stock as a diversified capital allocation and return story.

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