2024-05-08 06:47:01 ET
Summary
- Texas Instruments has led the Discrete, Analog, and Optoelectronics (DAO) market until 2021.
- The company is now losing its leadership position as it lags behind its analog competitors in terms of market share and revenue growth.
- We identify the reasons for its underperformance and its competitive advantages to better determine the outlook of the company.
In our previous evaluation of Texas Instruments Incorporated ( TXN ), we highlighted the company's steady dividend payout ratio of 52.8%, alongside a projected continued dividend growth rate of 6%. Moreover, the company has maintained stable free cash flow generation, boasting an average FCF margin of 30.9% over the past decade. However, we also noted the company’s low growth performance over the past 10 years, as seen in the table below. With a 10-year average total revenue growth rate of merely 3.68%, Texas Instruments lags behind its leading analog competitors, falling below the industry average of 12.39%.
Company | Revenue Growth (10-year Average) |
Monolithic Power ( MPWR ) | 22.56% |
Lattice ( LSCC ) | 8.29% |
Marvell ( MRVL ) | 4.93% |
Analog Devices ( ADI ) | 15.92% |
Broadcom ( AVGO ) | 30.79% |
Microchip ( MCHP ) | 16.42% |
TI | 3.68% |
NXP ( NXPI ) | 10.67% |
onsemi ( ON ) | 11.48% |
Skyworks ( SWKS ) | 9.68% |
Infineon ( OTCQX:IFNNY ) | 14.98% |
STMicro ( STM ) | 7.90% |
Renesas ( OTCPK:RNECF ) | 4.69% |
Qorvo ( QRVO ) | 11.43% |
Average | 12.39% |
Read the full article on Seeking Alpha
For further details see:
Texas Instruments: Losing The Analog Market (Rating Downgrade)