Why Texas Instruments (TXN) Stock Is Rising Today

NEW YORK (TheStreet) -- Texas Instruments (TXN) shares are up 0.5% to $49.24 on Friday after the chip maker raised its quarterly dividend by 13% to 34 cents per share or $1.36 per share annualized.

Texas Instruments has increased its dividend every year for 11 straight years while its share repurchase program has reduced its outstanding share count by 38% since 2005.

The dividend is payable November 17 to shareholders of record on October 31.

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Separately, TheStreet Ratings team rates TEXAS INSTRUMENTS INC as a "buy" with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate TEXAS INSTRUMENTS INC (TXN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, revenue growth, notable return on equity and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • TEXAS INSTRUMENTS INC has improved earnings per share by 6.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TEXAS INSTRUMENTS INC increased its bottom line by earning $1.92 versus $1.50 in the prior year. This year, the market expects an improvement in earnings ($2.41 versus $1.92).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.2%. Since the same quarter one year prior, revenues slightly increased by 8.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, TEXAS INSTRUMENTS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $775.00 million or 14.81% when compared to the same quarter last year. In addition, TEXAS INSTRUMENTS INC has also modestly surpassed the industry average cash flow growth rate of 7.63%.
  • You can view the full analysis from the report here: TXN Ratings Report
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