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Texas Instruments (TXN) is a Top Dividend Stock Right Now: Should You Buy?
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Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Texas Instruments in Focus
Headquartered in Dallas, Texas Instruments (TXN - Free Report) is a Computer and Technology stock that has seen a price change of -7.25% so far this year. Currently paying a dividend of $1.15 per share, the company has a dividend yield of 2.63%. In comparison, the Semiconductor - General industry's yield is 0.51%, while the S&P 500's yield is 1.42%.
In terms of dividend growth, the company's current annualized dividend of $4.60 is up 9.3% from last year. In the past five-year period, Texas Instruments has increased its dividend 5 times on a year-over-year basis for an average annual increase of 18.99%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Texas Instruments's current payout ratio is 52%. This means it paid out 52% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, TXN expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $9.12 per share, representing a year-over-year earnings growth rate of 10.41%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that TXN is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).
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Texas Instruments (TXN) is a Top Dividend Stock Right Now: Should You Buy?
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Texas Instruments in Focus
Headquartered in Dallas, Texas Instruments (TXN - Free Report) is a Computer and Technology stock that has seen a price change of -7.25% so far this year. Currently paying a dividend of $1.15 per share, the company has a dividend yield of 2.63%. In comparison, the Semiconductor - General industry's yield is 0.51%, while the S&P 500's yield is 1.42%.
In terms of dividend growth, the company's current annualized dividend of $4.60 is up 9.3% from last year. In the past five-year period, Texas Instruments has increased its dividend 5 times on a year-over-year basis for an average annual increase of 18.99%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Texas Instruments's current payout ratio is 52%. This means it paid out 52% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, TXN expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $9.12 per share, representing a year-over-year earnings growth rate of 10.41%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that TXN is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).