I'm Making a Bold Call on Texas Instruments Stock. Here's My Reasoning.
Key Points
Texas Instruments has an attractive 3% dividend yield.
The dividend has been increased annually for 22 consecutive years.
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Chipmaker Texas Instruments (NASDAQ: TXN) is largely being ignored by investors today because artificial intelligence (AI) chips are all the rage. Texas Instruments makes analog chips, which are older and simpler chips that convert real-world events into digital signals (think pressing a button). That's not sexy, but it is important. Which is why I'm making the bold call that boring Texas Instruments will eventually be a Dividend King.
Texas Instruments has a solid start
Texas Instruments is currently offering a very attractive 3% dividend yield. That's toward the high end of the stock's historical yield range. If you are a long-term dividend investor, like I am, now is probably a good time to be looking at Texas Instruments.
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What's most exciting about Texas Instruments, however, is its 22-year-long streak of annual dividend increases. Right now, Texas Instruments is making capital investments in its business to prepare for future demand, and it has just announced its intention to buy Silicon Labs (NASDAQ: SLAB). Given that backdrop, the modest 4% dividend hike in 2025 is very reasonable and not the least bit worrying.
I predict there are more dividend hikes to come
My expectation is that Texas Instruments will eventually become a Dividend King. It will require 38 additional years of dividend growth to get there, but that isn't an outlandish expectation. The world is increasingly digital, and Texas Instruments makes chips that support the digital transition. They are simple chips, but they are also vital to the process.
Even AI can't exist without Texas Instruments' boring chips, noting that the company's sales to support data centers rose 70% year over year in the fourth quarter of 2025. While investors are focused on AI chipmakers like Nvidia (NASDAQ: NVDA), Texas Instruments continues to support the backbone that allows AI and a host of other technological advances to thrive. For example, your hot new cellphone probably has Texas Instruments chips, noting that the company has more than 100,000 customers and sells over 80,000 products.
More digital means more chips means more dividends
The logic behind my bold call that Texas Instruments will eventually become a Dividend King is very simple. The world needs what this industry-leading analog chip company makes if the digital transition is going to continue. If you love dividends as much as I do, you should check out Texas Instruments while its yield is still historically attractive.
Should you buy stock in Texas Instruments right now?
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Reuben Gregg Brewer has positions in Texas Instruments. The Motley Fool has positions in and recommends Nvidia and Texas Instruments. The Motley Fool has a disclosure policy.
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