Dividendology on $TXN (Oct 27, 2026)

The fourth stock that just announced an increase in dividends and that you should know about is a stock that I keep in my personal portfolio, Texas Instruments, which announced a 7 % increase.

Interestingly, if you look at the stock price over the past five years, you will find that it has made little to no progress for about four years and has been very volatile. Then we saw this huge increase in the share price, which has risen by 72% since the beginning of the year.

Looking at my personal portfolio, we can see that I have currently earned approximately 102-103% in this financial position. So, what happened? Why do I keep it in my wallet? Okay, we need to step back for a moment, because you have to realize that Texas Instruments has historically been an amazing stock in dividend growth .

Go to the dividend breakdown sheet and take a look at "Texas Instruments ". You can see that the yield is slightly less than 2% , but at first glance you will see some major caveats, such as negative free cash flow growth , and a free cash flow payout ratio that is close to 200%.

While they increased dividend payouts at a rapid rate from 2015 to around 2020-2021, dividend growth has slowed in the last few years . At first glance there seem to be a lot of red flags, but you need to understand what is happening internally in the company.

So, let's start by assessing what was happening with the company's free cash flow. Okay, if we move on to our free cash flow analysis sheet , let's enter the data from Texas Instruments.

This is where we begin to solve problems. We can see that operating cash flows have continued to achieve good growth for most of the past decade. In fact, it was capital spending that expanded significantly.

Remember that free cash flow is simply operating cash flows less capital expenditures. Dividends are paid from free cash flow. What you will notice is that capital spending increased significantly from 2020 to 2023, but we are beginning to see a decline in that capital spending.

Why was there such a surge in this capital expenditure? Well, ultimately, the goal was to reduce chip costs by about 40% to expand overall profit margins. Therefore, this was a long-term step.

This is a step they expect to bear great fruit . Here we can see the period of high capital expenditure they were talking about, and this capital expenditure was a long-term investment in business.

Here is the end result of this long- term investment. Since the period of high capital expenditure has significantly reduced the stock's free cash flow, you can see that the stock's long-term price follows the stock's free cash flow.

It has fallen significantly, but as we are now at the end of this high capital expenditure, the free cash flow per share is rising, and they have stated that they are on track to deliver more than $8 in free cash flow per share according to the current 2026 revenue consensus.

So, to put that in context, go to our Stocks Screener and look at Texas Instruments. Look at the free cash flow of the stock. Before the period of high capital expenditure, it was around $6.47.

Therefore, we should reach record levels of free cash flow per share in 2026. This is really exciting to do. Thus, because they have succeeded in carrying out this massive capital expenditure, the market is now aware of what is happening .

We are beginning to see strong levels of dividend growth again, and the market has responded by pricing the stock accordingly, with Texas Instruments up 72% in 2026 alone. Therefore, I congratulate everyone who continued to hold onto this stock.

Higher levels of dividend growth are certainly on the way.