Texas Instruments Incorporated (TXN): investment thesis checklist
What a value investor writing down why they own Texas Instruments Incorporated would be relying on, read from its filings: the figures that have carried the business, the lines a reader might set on them, and the published tests it meets today. A list to write against, not a view on the company.
1. The figures the case would rest on
- Return on invested capital: 19.0% in FY2025; between 17.1% and 48.2% over 10 filed years, median 34.3%. Does the thesis need it to stay inside that range?
- Return on equity: 30.7% in FY2025; between 28.4% and 62.0% over 10 filed years, median 47.4%. Does the thesis need it to stay inside that range?
- Free cash flow yield: 1.6% in FY2025; between 0.9% and 6.5% over 10 filed years, median 3.7%. Does the thesis need it to stay inside that range?
- EV to EBIT: 28.22x in FY2025; between 14.33x and 33.58x over 10 filed years, median 21.04x. Does the thesis need it to stay inside that range?
- Price to earnings: 31.83x in FY2025; between 16.91x and 36.06x over 10 filed years, median 24.30x. Does the thesis need it to stay inside that range?
- Gross margin: 57.0% in FY2025; between 57.0% and 68.8% over 10 filed years, median 63.9%. Does the thesis need it to stay inside that range?
- Operating margin: 34.1% in FY2025; between 34.1% and 50.6% over 10 filed years, median 40.7%. Does the thesis need it to stay inside that range?
- Net debt to EBITDA: 1.45x in FY2025; between 0.36x and 1.60x over 10 filed years, median 0.56x. Does the thesis need it to stay inside that range?
- Revenue growth, 5-year CAGR: 4.1% in FY2025; between -0.5% and 6.5% over 10 filed years, median 2.6%. Does the thesis need it to stay inside that range?
- Share count change: -0.7% in FY2025; between -3.8% and 0.3% over 10 filed years, median -1.1%. Does the thesis need it to stay inside that range?
2. What must stay true: guardrails a reader might set
Each line is drafted from Texas Instruments Incorporated's own current figure, never from a level we think a business should clear, and replayed over its filed years. They are a reader's to keep, edit or drop.
Debt to Equity stays at or below 1.14x
Today 0.91x. Replayed over 10 filed years, it held in every one.
Return on Invested Capital stays at or above 15.2%
Today 18.96%. This indicator depends on inputs (market price, multi-statement composites) whose history is not deep enough to re-derive it with the same formula as the live value, so no honest retro-test exists for it.
Dividend Rate stays at or above $6.01
Today $6.08. This indicator depends on inputs (market price, multi-statement composites) whose history is not deep enough to re-derive it with the same formula as the live value, so no honest retro-test exists for it.
3. What would break it
- A filed year in which debt to equity rose above 1.14x.
- A filed year in which return on invested capital fell below 15.2%.
- A filed year in which dividend rate fell below $6.01.
4. The published tests it meets today
Of 30 tests value investors published: 1 met, 29 not met, 0 we could not complete. Counts, never a score.
Meets: ROIC at or above WACC.
What this cannot tell you
What the numbers say today, not the day one stops being true. The reasons are not written down.
An account adds
One email the night a number you wrote down breaks. Silence otherwise.
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How this is computedA computation on accounts filed with the SEC, not a recommendation and not advice. Past filings do not indicate future results. Risk disclaimer.