Texas Instruments Lifts Dividend 33%, Boosts Share BuybackIan King and Karl Baker
Texas Instruments Inc., the largest maker of analog chips, increased its quarterly dividend by 33 percent and said it added $5 billion to its stock repurchase program. The shares rose the most in more than eight months.
The quarterly dividend will rise to 28 cents a share from 21 cents, payable on May 20 to shareholders of record as of April 30, the Dallas-based company said yesterday in a statement.
With the addition to the stock buyback program, the company has an outstanding authorization to repurchase $8.4 billion in shares, Texas Instruments said. The announcement yesterday marks the 10th straight year of dividend increases. Texas Instruments has an indicated dividend yield of 3.45 percent, according to data compiled by Bloomberg, among the highest in the semiconductor industry.
“We’re focused not just on top line growth but on returning cash to stockholders,” said Chief Financial Officer Kevin March, said on a conference call today. “Over the last eight to nine years we have reduced our number of shares by 36 percent.”
Dividend growth at Texas Instruments has been the highest among its peers in the semiconductor industry for the past seven years, said Chris Danely, an analyst at JPMorgan Chase & Co.
“The company’s dividend growth has been driven by a combination of superior revenue growth and the secular increase in margins,” he wrote in a research report today. He rates the company as overweight with a price target of $33.
The shares rose 5.2 percent to $34.18 at the close in New York, for the biggest gain since June 29. The stock has climbed 11 percent this year, compared with a 6.3 percent increase for the Standard & Poor’s 500 Index.