As far as technology goes, Texas Instruments (NASDAQ:TXN) certainly isn't the most exciting name out there. The sprawling chip maker supplies all sorts of industries -- from automakers to telecommunications to consumer electronics -- with all sorts of silicon solutions. One of the oldest and most diversified names in the semiconductor business, growth isn't the name of the game here. 

However, that doesn't mean investors should call this technologist a pass. While ebbs and flows are normal in the chip industry, TI is a stalwart -- and dedicated to keeping the cash spigot open for shareholders.

Slow-and-steady as it goes

There has been no shortage of innovation in the world of semiconductors in the last few years. Cloud computing, artificial intelligence, and new uses for connectivity spurred on by the "Internet of Things" have all kept demand running high -- but Texas Instruments is rarely in the limelight as far as that innovation goes. And as far as headline numbers are concerned, revenue at TI has been unimpressive. Over the last trailing five year stretch, total sales are up a modest 19%. That's including a 3% slide over the last trailing 12-months through the second quarter of 2019 as TI and its peers work through a cyclical downturn in global chip demand.

People wearing white lab suits walking through a semiconductor factory.

Image source: Texas Instruments.

As boring as the business may appear on the surface, though, TI is fueling consistent returns to investors. The recent sales slump -- which inevitably crops up every few years for tech hardware makers -- has led to lower earnings, but that hasn't put much of a damper on this stock. Management sees an uptick is demand through the end of 2019, and the strong growth that fuels the company's bottom-line results has investors feeling pretty good. In fact, TI does so well in this department, it easily trounces its peers in return on invested capital (ROIC, the return generated on a company's investment in new projects), which leads to consistent and above-average profit margins.

TXN Operating Margin (TTM) Chart

Data by YCharts.

A solid buy, but not a sweet deal either

Adding to the list of compelling reasons for TI is its cash return policy. The company's goal is to return all of its free cash flow (what's left after operating and capital expenditures) to investors via dividends and share buybacks (when a company purchases and retires stock, which boosts earnings per share for remaining shareholders). Over the last 12 months TI has generated $5.9 billion on revenue of $15.2 billion, and free cash flow is up 72% over the last five years.

Thanks to share repurchases, that free cash flow deployment has led to a 128% increase in earnings per share over the same five year stretch, and a recent 17% dividend hike means the stock is currently yielding 2.8% a year. TI stock is surely a buy, right? 

Maybe, for the right investor. Those looking for a quick bump or earth-shattering growth aren't going to find it here. Texas Instruments is, after all, priced as the quality business it is, currently sporting a price to free cash flow of 20.5. Investors have priced in a rebound from the current chip-making industry drought, as well as the generous and ongoing cash return policy. TI management has also issued a long-term rosy outlook, as it sees its investment in its manufacturing processes and focus on industrial and automotive chips leading to slow-and-steady sales growth, but to even bigger bottom-line increases for years to come. Put simply, this is a quality company trading at quality pricing, if not a premium.

However, for those looking for a stabilizing bellwether with a decent dividend payout for the long-haul, Texas Instruments is about as solid as they come.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.