While it might not yet be firing on all cylinders, Texas Instruments
In the fourth quarter of 2009, Texas Instruments (TI) achieved an even $3 billion in revenue and earnings of $0.52 per share. When compared to 2008 figures, we're looking at 21% sales growth and a ridiculous gain over the year-ago period's earnings of $0.08 per share.
Most importantly, the impressive sales growth did not ride in on the back of discount pricing -- gross margins improved by 8.9 percentage points to 52.9%. TI works in some intensely competitive markets and faces off against other brilliant businesses like Marvell Technology
Even so, TI still runs slightly below its targeted 55% gross margin and 30% operating margin. With new manufacturing capacity coming online -- purchased from defunct memory chip maker Qimonda -- it's a fair bet that TI will continue to widen its margins and sales for at least as long as this economic recovery lasts.
TI stock isn't necessarily cheap today, at 20.6 times trailing earnings and 2.8 times sales, but there is at least enough growth and margin strength to support an argument for these prices. Would I buy TI at these levels? No, but I wouldn't sell either if I needed a stable, dividend-spouting stock in the foundation of my portfolio.
Would you buy TI today? Why -- or why not? Click over to TI's CAPS page and rate the stock accordingly, then feel free to share your insights in a brief commentary.
Fool contributor Anders Bylund holds no position in any of the companies discussed here. Linear Technology is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.