Is TXN a high-quality business?

AlphaMadera's AlphaQuality grade scores Texas Instruments Incorporated on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how TXN compares to a Buffett-style quality bar.

What is Texas Instruments Incorporated's AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to TXN based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes TXN a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

TXN - Texas Instruments Incorporated

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $269.33 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Cyclical & Capital-Intensive

AlphaQuality — archetype-weighted quantitative grade

B 70.2 / 100 composite

Composite Grade

Composite of six pillars weighted for cyclical & capital-intensive businesses. Purely quantitative — no stock price or analyst input.

Profitability

Weight: 15%

B- 66.4

5yr Avg ROIC 21.8% 95/100
Operating Margin Trend -4.53 pp/yr 0/100

Capital Efficiency

Weight: 15%

A 91.0

5yr Avg ROE 40.3% 100/100
5yr Share-Count CAGR -0.6% 74/100

Growth Quality

Weight: 10%

F 20.2

5yr Revenue CAGR -0.9% 18/100
5yr EPS CAGR -9.9% 0/100
Revenue-Growth Years (5) 3/5 60/100

Cash Generation

Weight: 15%

B 70.0

5yr FCF Margin 19.2% 89/100
5yr FCF/NI Conversion 0.51x 47/100

Balance Sheet

Weight: 25%

A 87.6

Net Debt / EBITDA 1.27x 81/100
Interest Coverage (EBIT/Int) 11.52x 87/100
Altman Z-Score 12.91 100/100

Stability

Weight: 20%

C+ 60.5

EPS Volatility (σ/μ) 0.36 49/100
Piotroski F-Score 7 78/100
Negative-Revenue Years (5) 2/5 60/100

4 of 5 gurus held; 1 added; 3 trimmed; 1 full exit.

Holders: 4 -1
Avg Δ position: -24.3%
New buys: 0
Full exits: 1

Soros sold -100%
Cooperman decreased -77%
Wood decreased -25%

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (15%) — 5yr Avg ROIC, Operating Margin Trend
Capital Efficiency (15%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (10%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (15%) — 5yr FCF Margin, 5yr FCF/NI Conversion
Balance Sheet (25%) — Net Debt / EBITDA, Interest Coverage (EBIT/Int), Altman Z-Score
Stability (20%) — EPS Volatility (σ/μ), Piotroski F-Score, Negative-Revenue Years (5)

We deliberately ignore stock price, analyst targets, and consensus ratings so the grade is suitable for backtesting forward returns. A minimum of 5 fiscal years of audited statements is required; distressed and highly leveraged infrastructure businesses are declared ungradable rather than forced into a numeric score.