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Texas Instruments: Can too Good, be too bad?

I am not sure how a company can stay in business when they make products that never break, and keep going down in price? I am still using the same Texas Instrument ( TXN ) calculator I bought back in 1982 for $50. If it did break, I could buy a replacement at Wal-Mart for $10.

So how has Texas Instruments been able to be so successful since 1930? Innovation and diversification!

Operating in 35 different countries, TXN sells a wide range of electronic components that are used in a wide variety of electronics, a slight change in strategy from just making useful educational calculating instruments. The company spends more than $1 billion a year for research and development, keeping it on the leading edge of the industry's demand for newer and faster technology. Texas Instruments comes in at 227 on the Fortune 500. The magazine also awarded TXN with the honor of being one of the "Most Admired Companies" for the 11 th straight year.

Their 41,000 patents looks like a holiday wish list for a computer geek: anilog semiconductor chips, digital signal processors, peripherals with embedded software, and OMAP low-energy connectivity technology. The stockings were hung with innovation and care, with hopes…

It would seem that the little elves at TXN will be busy serving more than 100,000 customers worldwide this year.

As with most stocks last month, TXN's price took a big dip, falling close to its 52-week low of $39.79. This truly was a buying opportunity because its value has risen 69% in just two years. Sales of $12 billion, net income of $2.1 billion, EPS of $2.30, and a dividend payout of 2.68%...let me see, punching all these numbers into my TI-30, this equals… an investment no-brainer.

Gary Greenwood has been successful in the business world and is now an educator on the fields of economics and personal finance. Having navigated through a number of investing challenges, Gary believes that investing is about not just making money, but also knowing enough to keep it.

This article was originally published on MarketIntelligenceCenter.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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