Texas Instruments (TXN) DIvidends Date & History

Key Takeaways

• Texas Instruments (TXN) offers a current dividend yield of approximately 2.7%, paid quarterly at $1.42 per share, annualizing to $5.68.
• The company boasts a 22-year streak of consecutive dividend increases, with 4.5% growth over the past year and 8.13% annualized over five years.
• Payout ratio exceeds 100% based on recent earnings, raising near-term sustainability questions, though supported by strong operational cash flow.
• Free cash flow (FCF) of $2.9 billion in 2025 covers about 58% of the dividend, with expectations for improvement as capital expenditures (capex) moderate.
• Moderate debt levels at around $14 billion provide financial flexibility, backed by consistent profitability in the semiconductor sector.
• Appeals to dividend growth investors seeking stability in analog chips, despite cyclical industry challenges.

Dividend Overview

Texas Instruments (TXN), a leading analog semiconductor manufacturer, maintains a robust dividend policy focused on growth and sustainability. The company currently pays a quarterly dividend of $1.42 per share, equating to an annual payout of $5.68 and a yield of about 2.7% based on recent stock prices. Payments occur quarterly, with the most recent ex-dividend date on January 30, 2026, and payment on February 10, 2026. TXN qualifies as a dividend growth stock, having raised its payout for 22 consecutive years, reflecting commitment to shareholders amid the cyclical semiconductor market. This profile balances reliable income with moderate yield, attracting long-term investors rather than high-yield seekers.

Dividend History and Growth

Texas Instruments has a storied dividend history, declaring its first payout in 1962 and initiating consistent growth since 2004. The company marked its 22nd consecutive annual increase in 2025, boosting the quarterly dividend 4% from $1.36 to $1.42 per share. Over the past year, dividends grew 4.5%, with five-year annualized growth at 8.13% and stronger 10-year rates around 14%. No cuts have occurred in decades, underscoring a strategy prioritizing shareholder returns through all free cash flow over time, even during industry downturns. This consistency positions TXN as a reliable income generator in semiconductors.

Dividend Sustainability and Payout Ratio

TXN's dividend sustainability faces scrutiny with a payout ratio over 100%—around 102-104%—indicating recent earnings barely cover or fall short of distributions. However, operational cash flow of $7.2 billion in 2025 provides ample coverage, while FCF reached $2.9 billion (after $4.6 billion capex), funding about 58% of the $5.0 billion dividend outlay. Long-term debt stands at $13.5 billion (current portion $0.5 billion), manageable with investment-grade ratings and interest coverage exceeding 10x. As capex eases from 2025 peaks tied to 300mm wafer expansions and CHIPS Act incentives, FCF margins—historically 20-30%—should bolster payouts, supporting ongoing growth.

Dividend Compared to Industry Peers

In the semiconductor industry, where average yields hover below 1-2%, TXN's 2.7% stands out as competitive. Peers like Analog Devices (ADI) yield about 1.3-1.4% with a safer 72% payout ratio, while Microchip Technology (MCHP) matches at ~2.6-2.7% but with elevated ratios over 100%. NXP Semiconductors (NXPI) offers ~2.0% with a conservative 51% payout, and Qualcomm (QCOM) ~2.8% at 71%. TXN's yield exceeds many growth-oriented peers like NVIDIA (negligible yield), affirming its appeal for income within analog and mixed-signal chips.

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Is This Stock Attractive for Dividend Investors?

Texas Instruments (TXN) suits dividend growth investors prioritizing long-term payout escalation and consistency over sky-high yields. Its 22-year increase streak and focus on returning all FCF to owners appeal to those comfortable with semiconductor cyclicality, where analog chips provide relative stability versus digital foundries. Conservative income seekers may pause at the elevated payout ratio and capex-driven FCF dip, but robust cash generation—$7.2 billion operating cash flow—and moderating investments signal resilience. Long-term holders valuing sector leadership and shareholder returns find alignment, particularly as U.S. manufacturing expansions via CHIPS Act enhance moats. Balanced portfolios blending growth and income may allocate here, monitoring earnings coverage amid inventory cycles and end-market demand. High-yield chasers might look elsewhere, but TXN's track record supports patient, quality-focused strategies without aggressive speculation.

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