#2 - Texas Instruments (NASDAQ:TXN)
An established semiconductor company such as Texas Instruments Incorporated (NASDAQ: TXN) may not seem particularly disruptive. But the chip market is highly segmented. And Texas Instruments is the market share leader in the analog semiconductor market with about 20% of the market.
Analog chips are essential in helping digital chips function properly. And the digital movement in everything from automobiles to industrial manufacturing will help to fuel continued growth for Texas Instruments. To that end the company is expected to show strong revenue and earnings growth over the next five years.
Once a customer is using the company’s chips, it creates high customer switching costs. This in turn gives Texas Instruments pricing power that is reflected in the company’s healthy profit margins. With a price-to-earnings ratio of around 18x at the time of this writing, Texas Instruments is fairly valued compared to the broader market.
Except for Microsoft, Texas Instruments is the only stock on this list that pays a dividend. And it’s a good one. With a dividend yield of 2.82% and an annual payout of $4.96. Plus, the company has increased its dividend in each of the last 19 consecutive years.
About Texas Instruments
Texas Instruments Incorporated designs, manufactures, and sells semiconductors to electronics designers and manufacturers in the United States and internationally. The company operates through Analog and Embedded Processing segments. The Analog segment offers power products to manage power requirements across various voltage levels, including battery-management solutions, DC/DC switching regulators, AC/DC and isolated controllers and converters, power switches, linear regulators, voltage references, and lighting products.
Read More - Current Price
- $198.20
- Consensus Rating
- Hold
- Ratings Breakdown
- 9 Buy Ratings, 11 Hold Ratings, 3 Sell Ratings.
- Consensus Price Target
- $206.95 (4.4% Upside)
