Texas Instruments (TXN) Declares Its Quarterly Dividend, Is The Stock Still Undervalued?
Texas Instruments (TXN) is back in focus after its board declared a quarterly cash dividend of $1.42 per share, payable on August 11, 2026, to stockholders of record on July 31.
See our latest analysis for Texas Instruments.
Texas Instruments shares have pulled back recently, with the stock down 2.47% on the day and 8.81% over the past week. However, the 90 day share price return of 23.58% and 1 year total shareholder return of 34.79% still point to strong underlying momentum.
If Texas Instruments has you thinking about how other chip related opportunities are reacting to the AI and infrastructure story, it could be worth sizing up 53 AI infrastructure stocks
After Texas Instruments surged over the past year, the recent pullback leaves the stock trading below average analyst targets, while internal fair value estimates suggest a premium. Is the market applying healthy caution or mispricing the cash story here?
Most Popular Narrative: 34.8% Undervalued
Texas Instruments last closed at $284.02, while the most followed narrative pegs fair value at $435.69, a sizeable gap that centers on long term capacity and cash generation.
Texas Instruments is in the midst of a multiyear capacity-expansion cycle that is temporarily suppressing free cash flow but materially enhancing the company’s long-term competitive position. The buildout of U.S.-based 300mm analog manufacturing is expected to structurally improve cost efficiency, support higher gross margins, and increase supply-chain resilience. As these assets ramp and utilization normalizes, TXN should regain its historical free-cash-flow profile, supported by diversified end-market exposure across industrial, automotive, aerospace/defense, and energy infrastructure.
Curious what sits behind that higher fair value for Texas Instruments? The narrative leans on stronger margins, steadier cash generation, and a richer future earnings multiple. The full breakdown spells out the revenue, margin, and valuation assumptions driving that $435.69 figure.
Result: Fair Value of $435.69 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, Texas Instruments still faces risks if capacity investments drag on cash generation longer than expected or if AI related demand for analog and embedded products proves weaker than currently assumed.
Find out about the key risks to this Texas Instruments narrative.
Another View On Texas Instruments: Cash Flows Send A Different Signal
While the most popular Texas Instruments narrative points to a fair value of $435.69 and labels the stock as undervalued, the SWS DCF model tells a cooler story. On that cash flow view, TXN at $284.02 sits above an estimated value of $233.65, which screens as overvalued. Which lens do you trust more when cash timing is this important?
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Texas Instruments for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 47 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
With mixed signals on value and sentiment around Texas Instruments, it makes sense to move quickly, test the assumptions, and weigh both the upside and the downside using the 2 key rewards and 3 important warning signs.
Looking for more investment ideas beyond Texas Instruments?
Do not stop with Texas Instruments when there are other potential opportunities on the radar. Use these focused screens to quickly narrow down stocks that fit your plan.
- Target stability and income by reviewing companies that show up in the 8 dividend fortresses for ideas that may suit a yield focused approach.
- Spot potential mispricings by scanning the 47 high quality undervalued stocks and comparing those stocks with what you see in Texas Instruments today.
- Protect your downside by concentrating on the 84 resilient stocks with low risk scores and seeing which companies align with a more conservative risk profile.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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