Topic: Dividend Stocks

Industrial and automotive markets now represent 70% of total sales for Texas Instruments

Texas Instruments Inc.

This firm’s strategic focus on industrial and automotive markets positions it exceptionally well for sustained growth. These two segments collectively accounted for 70% of first-quarter revenues, providing stability and expansion opportunities as industrial automation accelerates and vehicle electrification continues.

The company’s financial strength is particularly impressive, with $5 billion in cash and short-term investments supporting both aggressive growth initiatives and shareholder returns.

Meanwhile, the stock trades at 36.7 times the company’s forward earnings forecast.

TEXAS INSTRUMENTS INC. (Nasdaq symbol TXN) is a leading maker of analog chips. Its products convert inputs, like touch, sound and pressure, into electronic signals that computers can understand.

In the quarter ended March 31, 2025, the company’s revenue rose 11.1%, to $4.07 billion from $3.66 billion a year earlier. That beat the $3.91 billion consensus forecast. The higher revenue was partly because manufacturers are placing larger orders to avoid tariffs.

The company’s Analog segment was particularly strong, generating $3.21 billion in revenue (a 13% increase), while the smaller Embedded Processing segment saw a slight 1% decline to $647 million.

Earnings in the quarter also gained 6.7%, to $1.28 a share (or a total of $1.18 billion) from $1.20 a share (or $1.11 billion).

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Recent developments underscore the firm’s commitment to innovation and market leadership. In March 2025, TI introduced new functionally isolated modulators, the first of their kind in the industry, enabling more precise motor control for robotics applications. In May, TI showcased advanced power-management technologies at the PCIM 2025 expo, including the industry’s first automotive-qualified inductor-inductor-capacitor controller for light electric vehicle charging

Dividend Stocks: Dividend payment increases as results remain steady 82%

Texas Instruments is now building new chip plants in Texas and Utah. These facilities will help lower the company’s operating costs and put it in a better position to withstand tariffs and economic downturns.

For 2025, the company will probably earn $5.37 a share, and the stock trades at 36.7 times the estimate. That’s a reasonable multiple in light of Texas Instruments’ high research spending—it equaled 12.7% of the company’s revenue in the latest quarter.

With the November 2024 payment, Texas Instruments increased your quarterly dividend by 4.6%, to $1.36 a share from $1.30. The new annual rate of $5.44 yields 2.8%.

Texas Instruments has raised your dividend by an average 8.6% annually over the last 5 years. The company’s TSI Dividend Sustainability Rating is Above Average.

Recommendation in Wall Street Stock Forecaster: Texas Instruments Inc. is a buy.

Comments

  • Michael 

    Why plug US dividend stocks when the new US tax law will decimate interest income for Canadian’s holding them. Did I miss the advisory’s commentary or advice on this topic?

    • Scott 

      It’s hard to say at this point—but if it’s likely part of a bargaining process by the White House administration.

      This includes targeting what the U.S. considers “discriminatory or unfair taxes” imposed by foreign governments—specifically, Canada’s Digital Services Tax (DST).

      A key concern is the bill’s potential impact on the Canada-U.S. tax treaty, which could significantly raise withholding tax rates for Canadian corporations and individuals with U.S.-sourced income. For instance:

      Canadian individuals currently face a 15% withholding tax on dividends received from U.S. securities; under Section 899, this rate could escalate to 50% over time.

      Canadian corporations currently subject to a 5% withholding tax on dividends from U.S. subsidiaries would also see that rate increase to 50%.

      Either way, the bill still needs to pass the Senate.

      We’ll keep an eye on the situation and update our advice for Canadians holding high-yield U.S. stocks, and how investors would get back the withholding tax if possible on various types of registered and non-registered accounts–if the tax should come into effect.

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