April 13, 2021

Is Texas Instruments Stock A Buy?

 


Texas Instruments Incorporated [NASDAQ: TXN] is an American technology company, which designs, manufactures, tests and sells analog and embedded semiconductors in industrial, personal electronics, automotive, communications equipment and other markets.

 

It operates in two segments:

 

Analog and

Embedded Processing.

 

It is often said that the history of Texas Instruments (TI) is very closely associated with the American electronics industry.

 

TI produced the world’s first silicon transistor in 1954, and the first transistor radio the same year. It was a TI engineer Jack Kilby who invented the first semiconductor integrated circuit in 1958, and introduced the first single-chip microcontroller (an assembly of electronic components, fabricated as a single unit onto one piece of silicon) in 1970, which helped fuel the modern electronics revolution.

 

TI also invented the hand-held calculator in 1967. The company, which traces its roots to Geophysical Service, a petroleum-exploration firm founded in 1930, is based in Dallas, Texas.

 

Long-term investors in Texas Instruments [NASDAQ: TXN] have reaped rich returns over the years.

 

TXN has been a major beneficiary of increasing automation of factories and automobiles and the same is reflected in its ballooning stock price.

 

Despite the economic wreckage caused by the pandemic, TXN has returned more than 265 percent over the last five years, which is mainly made up of capital gains, but also dividends. The stock gained 28% in 2020, and is up 4.5% this year.

 

 

Texas Instruments derives a larger portion of its revenue from manufacturers of industrial equipment, and as such, its earnings and forecasts to a certain extent serve as a broader guide of how the economy is performing.

 

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