Semiconductor Yielding Higher Dividends: Broadcom versus Texas Instruments
Broadcom Outperforms Texas Instruments in a Decade of Strong Growth
In a comparison of financial performances and dividend records, both Broadcom and Texas Instruments (TI) have shown impressive growth over the past decade, but Broadcom has outperformed TI significantly in total investment return.
Financial Performance
Texas Instruments reported robust earnings growth in recent quarters, with Q2 2025 revenue rising 16.4% year-over-year to $4.45 billion and earnings per share (EPS) increasing 15.5% to $1.43. Net income grew 14.9% to $1.29 billion, driven by the industrial sector recovery and semiconductor investments, including a $60 billion U.S. semiconductor investment plan.
Broadcom, on the other hand, delivered $51.574 billion revenue in fiscal 2024, showing strong momentum from AI semiconductor growth and VMware integration. Its AI revenue is forecasted to increase 60% year over year in Q3 fiscal 2025. Despite some expected sequential gross margin contraction and high debt, Broadcom benefits from diversified segments, including semiconductor solutions and infrastructure software.
Dividend Records
Texas Instruments declared a $1.36 per share dividend recently, reflecting a stable and growing dividend policy aligned with its strong financial position. Broadcom also pays dividends, but specific recent dividend amounts or growth rates were not detailed in the search results. However, Broadcom is known for a sizable dividend yield and a history of dividend increases.
Investment Returns
Over the last decade, a $1000 investment in Broadcom would have grown to approximately $24,885 (a gain of about 2,388%), excluding dividends, vastly outperforming the S&P 500 and gold over the same period. While specific long-term return numbers for Texas Instruments were not given in the results, Broadcom's exponential rise indicates it has outperformed TI in capital appreciation.
Summary
Broadcom has outperformed Texas Instruments in overall investor returns over the last decade, fueled by its strong growth in AI semiconductors, infrastructure software, and strategic acquisitions. Texas Instruments remains a solid performer with consistent earnings growth, strong dividends, and ongoing investment in semiconductor capacity, reflecting financial strength but relatively more modest market gains.
Broadcom has diversified into the enterprise software business, helping enterprises improve their efficiency and secure their networks. TI, on the other hand, has built an 18-year track record of annual payout hikes and could achieve Dividend Aristocrat status if it maintains this record for seven more years. Broadcom's dividend payout rose 59-fold between 2010 and 2021, while TI's customers use its products in industrial, automotive, personal electronics, and many other areas.
In conclusion, both companies have shown strong financial performances, but Broadcom has outpaced TI in terms of total returns since its IPO, providing a five times higher total return. TI's consistent earnings and dividend growth, coupled with its leadership in the analog semiconductor market, position it well within its industry, while Broadcom's diversification and strong growth in AI semiconductors and software make it a leader in its market.
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