Key Takeaways for Texas Instruments Stock as of July 2026
- CFO Rafael Lizardi told analysts free cash flow hit $4.4 billion on a trailing 12-month basis in the first quarter of 2026, up from just $1.7 billion a year earlier, while the company returned $6 billion to owners over that same span, including $1.3 billion in dividends paid in Q1 alone.
- The quarterly dividend stands at $1.42, up from $1.36, a level it held for four consecutive quarters, which followed $1.30 the year before that.
- Payout ratio fell to 83.5% as of 3/31/26 after peaking at 110.92% the prior quarter, and the dividend yield has cooled to 1.9% as of July 15, 2026, down from a 3.3% high in December 2025.
- TIKR’s mid-case valuation model puts Texas Instruments stock at a $524 target price by 12/31/30, a 74% total return and a 13% annualized rate from today’s $301 share price.
Texas Instruments Stock’s Dividend Case Rests on a Six-Year Capacity Bet Finally Paying Off
Texas Instruments (TXN) closed its first quarter of 2026 with revenue of $4.8 billion, up 9% sequentially and 19% year-over-year, and CEO Haviv Ilan framed the results as proof that a multiyear capacity buildout is starting to convert into cash. That matters directly for Texas Instruments stock because the dividend has always been funded off free cash flow, not GAAP earnings, and free cash flow is exactly what changed this quarter.
CFO Rafael Lizardi told investors that cash flow from operations reached $1.5 billion in the quarter and $7.8 billion on a trailing 12-month basis. Free cash flow over that same trailing period came in at $4.4 billion, more than double the $1.7 billion the company posted a year earlier. Lizardi credited a moderating capital expenditure pace alongside the revenue recovery, noting capex ran $676 million in the quarter and $4.1 billion over the trailing 12 months.
Capital returns followed suit. The company paid $1.3 billion in dividends and repurchased $158 million of stock in Q1, bringing total shareholder returns to $6 billion over the trailing year. Speaking at Bernstein’s Strategic Decisions Conference in May, Ilan called the company’s investment program a “more than $20 billion investment cycle” spanning 2021 through 2026, built to secure what he described as diverse and long-lived product positions across analog and embedded chips that can run in factories, vehicles and networks for a decade or longer.
That long-lifecycle framing is the crux of the dividend story. Ilan said the goal from the outset was never to chase a single cycle but to prepare Texas Instruments stock for “the next 10 and 15 years,” and he pointed to embedded segment gross margins climbing as production shifts into TI’s own Lehi, Utah fab as evidence the internalization plan is working. Lizardi went further on the Q1 earnings call, telling analysts that “as long as revenue is growing mid- to high single digits, that $8 free cash flow per share is very probable” for 2026.
Quarterly free cash flow shows exactly how uneven that recovery has been. The company posted $0.56 billion in the quarter ended 6/30/25, climbed to $0.99 billion by 9/30/25 and $1.33 billion by 12/31/25, then pulled back to $0.84 billion in the quarter ended 3/31/26.
Estimates project a sharper acceleration from there: $1.96 billion for the quarter ending 6/30/26, $2.11 billion by 9/30/26, a peak of $2.32 billion by 12/31/26, before settling to $2.01 billion and $2.17 billion in the following two quarters. That trajectory is the concrete backing behind Lizardi’s comment that $8 free cash flow per share is “very probable” for 2026, and it gives Texas Instruments stock a cash cushion well beyond what the current dividend requires.
Ilan closed the earnings call by restating the company’s north star directly: “the best metric to measure progress and generate value to owners is the long-term growth of free cash flow per share.” For a dividend investor evaluating Texas Instruments stock, that sentence is the whole thesis in one line: the payout is a byproduct of a capacity cycle that just turned the corner from spending to harvesting.
Texas Instruments Stock’s Payout Ratio Looks Stretched Even as the Dividend Keeps Climbing
The trajectory tells a straightforward story: $1.30 per share held through late 2024, stepped up to $1.36 and held there for four straight quarters, then rose again to $1.42 by the end of 2025, where it remains as of 3/31/26.
That steady climb sits awkwardly next to a payout ratio that has spent most of the last two years above 90%, including two quarters over 100%. The ratio opened at 105.15% in mid-2024, dropped to 87.15%, then swung back above 100% twice more before peaking at 110.92% at the end of 2025.
Read against management’s own framing, that volatility looks less alarming than it appears on paper. GAAP earnings absorbed heavy depreciation and acquisition charges tied to the Silicon Labs deal and the tail end of the capacity buildout, while the cash actually funding the dividend, free cash flow, was climbing the entire time.
The payout ratio’s sharp drop to 83.5% by 3/31/26 is the first quarter where that gap between earnings and cash generation started closing in the dividend’s favor.
The yield has moved the opposite direction, falling from 3.3% in December 2025 to 1.9% by July 15, 2026, entirely a function of the stock price rally rather than any dividend cut. Whether that 1.9% yield still looks attractive next to a payout ratio hovering near 84% is the open question for anyone evaluating Texas Instruments stock today.
TIKR’s Model Puts Texas Instruments Stock at a $524 Target by 2030
TIKR’s mid-case valuation model puts Texas Instruments stock at a $524 target price by 12/31/30, implying a 74% total return and a 13% annualized rate from the current $301 share price.
That return profile places Texas Instruments stock among the more compelling combinations in large-cap semiconductors: a business compounding free cash flow per share while still paying a dividend that has never been cut through the entire capacity cycle. The dividend is one thread inside that total return figure, not the reason for it.
The case for reaching that target rests on the same points management made repeatedly this year: revenue growing in the high single to double digits, capex stepping down from its 2021-2026 peak, and Lehi and Sherman fab utilization climbing as more production moves internal. Ilan’s own framing at Bernstein, that the company is now “on the other side” of its investment cycle, is the operating backdrop TIKR’s model is pricing.
Should You Invest in Texas Instruments Incorporated?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up Texas Instruments Incorporated stock and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
You can build a free watchlist to track Texas Instruments Incorporated alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.
Access Professional Tools to Analyze TXN stock on TIKR for Free →
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
