Technology company Texas Instruments Incorporated (NASDAQ:TXN) recently announced it will be increasing its dividend payments again. On September 17, the company said that it would be hiking its quarterly dividend payments from $0.90 to $1.02, for an increase of 13%.
For investors who buy the stock at around $139 a share, that means they’ll be earning an annual yield of more than 2.9%. On a $25,000 investment, that would be $734 in dividend income every year.
Last year, the company hiked its payouts by 16.8%, from $0.77 to $0.90. The company’s most recent increase is the 17th year in a row that Texas Instruments has raised its dividend payments. Once it hits 25 straight years of dividend increases, it’s considered a Dividend Aristocrat.
The announcement comes less than two months after the company released its second-quarter results back in July. Although quarterly sales of $3.2 billion declined 12% year over year, the company still posted a profit of $1.4 billion – which was up 6% from the prior-year period.
Texas Instruments’ free cash flow of $5.7 billion for the past 12 months remained strong, down just 4% from a year ago.
Year to date, shares of Texas Instruments are up 8%, outperforming the S&P 500 and its 3% returns. The company’s shares currently trade at 25 times their earnings and 17 times their book value.
It’s a bit of steep price to pay for a company that’s struggled to generate much growth over the years, with its top line of $14.4 billion declining by 9% from the previous year. But for income investors, this could still be a solid long-term investment to hang on to for many years.
