This Tech Blue Chip Just Raised Its Dividend 17%

There are few tech companies as shareholder friendly as Texas Instruments (NASDAQ: TXN), and the company just proved it once again. The blue chip semiconductor giant -- the world's leading producer of analog chips and microcontrollers -- just raised its dividend a hefty 17%, from $0.77 to $0.90 per share. The dividend raise was all the more impressive considering the company raised the payout by 24% last year and the semiconductor sector remains in a downcycle due to the U.S.-China trade war.

At the current share price, the new $3.60 annual dividend per share comes to a dividend yield of about 2.8%, which is certainly not bad in a world where the 10-year Treasury note yields just 1.77%.

More than perhaps any other tech company, Texas Instruments puts its capital allocation philosophy and execution front and center. In early 2018, Texas Instruments set a new target for its dividend payout ratio at 40%-60% of trailing 12-month free cash flow. Over the last 12 months, that ratio was 47%. Assuming no increase in cash flow next year, the raised dividend would be about 55% of cash flow, still within the range, though getting toward the high end.

Source Fool.com