T-Mobile US, Inc. (TMUS) vs Texas Instruments Incorporated (TXN): Which Is the Better Buy in 2026?
As of 2026-06-19, TMUS is undervalued at $182, with a DCF intrinsic value of $506 and a margin of safety of 64%. TXN is overvalued at $323, with an intrinsic value of $283 and a margin of safety of -14%. Of the two, TMUS has the wider margin of safety.
Rewards
- ★Gross margin of 63.3% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★Share count has been reduced by 10% over the past 4 years through buybacks, increasing each share's claim on earnings.
- ★Each dollar of retained earnings has created $4.64 of earning power — management is an exceptional capital allocator.
- ★Texas Instruments Incorporated has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
- ★Return on equity has consistently exceeded 20% over 4 years, indicating efficient use of shareholder capital.
- ★Altman Z-Score of 8.73 indicates very low bankruptcy risk — the company is firmly in the safe zone.
Risks
- ⚠FCF yield of 7.8% suggests reasonable valuation assuming continued moderate growth.
- ⚠High leverage (2.12x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.
- ⚠Altman Z-Score of 1.66 places the company in the distress zone — financial patterns resemble those of companies that experienced bankruptcy.
- ⚠Buybacks have been poorly timed — 3 out of 4 years involved repurchases at relatively expensive valuations.
- ⚠FCF yield of 0.9% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
- ⚠Trailing P/E of 55.3x is 104% above the historical average of 27.1x — the stock trades at a premium to its own history.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
$1 Retained Earnings Test
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Discounted Cash Flow (DCF) Analysis
Learn more →Reverse DCF — Market-Implied Growth
Learn more →What growth rate is the market pricing in at $182?
The market implies +11.4% Owner Earnings growth, below historical trends — potential opportunity.
Standard FCF implies a more demanding +8.0%, reflecting heavy growth investment expected to generate future returns.
What growth rate is the market pricing in at $323?
The market implies +22.8% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +32.1%, reflecting heavy growth investment.
Economic Moat Score
Learn more →Narrow moat with revenue predictability as the key competitive advantage. Improving roic consistency would strengthen the moat.
Narrow moat with roic consistency as the key competitive advantage. Improving reinvestment efficiency would strengthen the moat.
Forensic Accounting
Learn more →M-Score Trend
M-Score Trend
Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is pessimistic — investigate whether fears are temporary or structural"
"Market is optimistic — be cautious and ensure you have a margin of safety"
Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
⚖️ Buffett Signal
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: TMUS vs TXN
Is T-Mobile US, Inc. or Texas Instruments Incorporated more undervalued in 2026?▼
Based on our discounted cash flow model, TMUS trades at a 64.1% margin of safety (intrinsic value $506 vs. price $182), compared to TXN's -13.9% margin of safety (intrinsic $283 vs. $323).
Which stock has a wider economic moat, T-Mobile US, Inc. or Texas Instruments Incorporated?▼
TXN scores 48/100 (Narrow moat), while TMUS scores 45/100 (Narrow moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Is T-Mobile US, Inc. in financial distress?▼
TMUS's Altman Z-Score of 1.7 places it in the Distress zone, signaling elevated bankruptcy risk. TXN scores 8.7 (Safe zone). The Altman Z-Score is a five-factor model that predicts insolvency within two years; scores below 1.81 indicate significant distress.
Which company has better free cash flow, T-Mobile US, Inc. or Texas Instruments Incorporated?▼
T-Mobile US, Inc. (TMUS) generates a 7.8% free cash flow yield, compared to Texas Instruments Incorporated's 0.9%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.
Which stock has higher return on invested capital, T-Mobile US, Inc. or Texas Instruments Incorporated?▼
TXN earns 17.9% ROIC versus TMUS's 9.6%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.
Which dividend is safer, T-Mobile US, Inc.'s or Texas Instruments Incorporated's?▼
TMUS's dividend earns a safety score of 91/100 (Very Safe), compared to TXN's 34/100 (Unsafe). TMUS has raised its dividend for 2 consecutive years.