) or "TI" has authorized the repurchase of additional shares
worth $5 billion of the company's common stock, bringing the
total outstanding authorization to $8.4 billion.
Additionally, the company also announced its decision to raise
the quarterly dividend by 7 cents to 28 cents per share. This
translates into a 33% increase from the prior dividend. The
increased dividend will be paid on May 20, 2013, to stockholders
of record as of Apr 30, 2013. Prior to this announcement, Texas
Instruments had been paying a quarterly dividend of 21 cents per
The strength of TI's business model is reflected in the
company's strong cash generation capabilities and its commitment
to returning value to shareholders. We believe that the continued
share buybacks and dividend hike will increase investor
enthusiasm for the shares.
TI's strong balance sheet and cash flows provide financial
flexibility in matters of incremental dividend, share repurchases
and strategic acquisitions. During the last-concluded quarter, it
spent $600 million on share repurchases and $235 million on cash
dividends. Cash and cash equivalents were $3.97 billion at
quarter-end, up $0.31 billion during the quarter. The debt to
total capital ratio was just 27.6%. We remain encouraged by TI's
strong cash position and its ability to service its long-term
Texas Instruments is one of the largest suppliers of analog
and digital signal processing (DSP) integrated circuits. The
company's fourth quarter earnings surpassed our expectations but
were down sequentially as well as from the year-ago quarter due
to softening demand and weak macro conditions.
However, TI's compelling product lineup, the increasing
differentiation in its business and lower-cost 300mm capacity
should drive earnings in the longer term. The increase in
dividend indicates that the company is confident about its steady
Currently, Texas Instruments has a Zacks Rank #3 (Hold). Other
stocks that have been performing well and are worth looking at
), all carrying a Zacks Rank #2 (Buy).
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