Industrial company Texas Instruments Inc. (NASDAQ: TXN) could be a sound investment in the current economic uncertainty. Even in the face of a likely recession, it will be able to continue to grow, as demand for its products will remain strong. In addition, the company regularly pays dividends.
Texas Instruments Inc. (TXN) makes analog and embedded chips that include a processor and memory to run program code. With a presence in two key semiconductor market segments, demand for Texas Instruments products has remained strong for many years.
Fortune Business Insights predicts the compound annual growth rate of the semiconductor industry through 2029 will be around 9%. This means the market will grow from $483 billion today to about $893 billion in seven years.
The advantage of Texas Instruments Inc. (TXN) is relatively low competition and a diversified customer base. The company currently supplies about 80,000 of its products to over 100,000 customers. Texas Instruments’ main sales areas are the industrial, automotive, and personal electronics sectors.
Revenue of Texas Instruments Inc. (TXN) in the first quarter of this year grew by 14% year-on-year. This is a slowdown from 27 percent growth a year earlier. But thanks to lower production costs, the company increased profits by 26%.
Most likely, the current situation in the economy will put pressure on the income of Texas Instruments. However, as the experience of recovering from the 2008-2009 recession shows, the company is able to quickly return to high growth rates.
It is important to note that Texas Instruments Inc. (TXN) remains a good investment for passive income. Between 2004 and 2021, dividend payments grew by an average of 25% per year. The current annual dividend is $4.6 per share and, at current prices, offers a dividend yield of around 3%.
Thus, the demand for semiconductors is growing, and Texas Instruments Inc. (TXN) chips are appearing in more and more products. This creates a solid platform for the company to continue growing.