TIMKEN CO (TKR) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TKR - US8873891043 - Common Stock
94.6 USD
+0.71 (+0.76%)
94.6 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to TKR. TKR was compared to 132 industry peers in the Machinery industry. Both the profitability and the financial health of TKR get a neutral evaluation. Nothing too spectacular is happening here. TKR is valued correctly, but it does not seem to be growing. Finally TKR also has an excellent dividend rating. With these ratings, TKR could be worth investigating further for dividend investing!.
1. Profitability
1.1 Basic Checks
- TKR had positive earnings in the past year.
- In the past year TKR had a positive cash flow from operations.
- In the past 5 years TKR has always been profitable.
- Each year in the past 5 years TKR had a positive operating cash flow.
1.2 Ratios
- TKR has a Return On Assets (4.37%) which is in line with its industry peers.
- TKR has a Return On Equity of 9.48%. This is comparable to the rest of the industry: TKR outperforms 59.85% of its industry peers.
- TKR has a Return On Invested Capital (7.75%) which is in line with its industry peers.
- TKR had an Average Return On Invested Capital over the past 3 years of 9.74%. This is in line with the industry average of 10.24%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.37% | ||
| ROE | 9.48% | ||
| ROIC | 7.75% |
ROA(3y)6.19%
ROA(5y)6.27%
ROE(3y)15.23%
ROE(5y)15%
ROIC(3y)9.74%
ROIC(5y)9.38%
1.3 Margins
- With a Profit Margin value of 6.54%, TKR perfoms like the industry average, outperforming 57.58% of the companies in the same industry.
- TKR's Profit Margin has declined in the last couple of years.
- TKR has a Operating Margin of 13.21%. This is in the better half of the industry: TKR outperforms 65.15% of its industry peers.
- In the last couple of years the Operating Margin of TKR has remained more or less at the same level.
- With a Gross Margin value of 31.40%, TKR perfoms like the industry average, outperforming 51.52% of the companies in the same industry.
- TKR's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.21% | ||
| PM (TTM) | 6.54% | ||
| GM | 31.4% |
OM growth 3Y1.88%
OM growth 5Y-0.66%
PM growth 3Y-4.77%
PM growth 5Y-4.19%
GM growth 3Y5.7%
GM growth 5Y0.9%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), TKR is creating some value.
- Compared to 1 year ago, TKR has about the same amount of shares outstanding.
- TKR has less shares outstanding than it did 5 years ago.
- TKR has a better debt/assets ratio than last year.
2.2 Solvency
- TKR has an Altman-Z score of 2.91. This is not the best score and indicates that TKR is in the grey zone with still only limited risk for bankruptcy at the moment.
- TKR's Altman-Z score of 2.91 is in line compared to the rest of the industry. TKR outperforms 48.48% of its industry peers.
- TKR has a debt to FCF ratio of 5.41. This is a neutral value as TKR would need 5.41 years to pay back of all of its debts.
- TKR has a Debt to FCF ratio of 5.41. This is comparable to the rest of the industry: TKR outperforms 53.03% of its industry peers.
- TKR has a Debt/Equity ratio of 0.67. This is a neutral value indicating TKR is somewhat dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.67, TKR is doing worse than 64.39% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | 5.41 | ||
| Altman-Z | 2.91 |
ROIC/WACC0.83
WACC9.34%
2.3 Liquidity
- A Current Ratio of 3.11 indicates that TKR has no problem at all paying its short term obligations.
- The Current ratio of TKR (3.11) is better than 78.03% of its industry peers.
- TKR has a Quick Ratio of 1.71. This is a normal value and indicates that TKR is financially healthy and should not expect problems in meeting its short term obligations.
- Looking at the Quick ratio, with a value of 1.71, TKR is in the better half of the industry, outperforming 71.21% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.11 | ||
| Quick Ratio | 1.71 |
3. Growth
3.1 Past
- TKR shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -10.83%.
- Measured over the past 5 years, TKR shows a small growth in Earnings Per Share. The EPS has been growing by 4.71% on average per year.
- Looking at the last year, TKR shows a decrease in Revenue. The Revenue has decreased by -1.01% in the last year.
- Measured over the past years, TKR shows a small growth in Revenue. The Revenue has been growing by 3.83% on average per year.
EPS 1Y (TTM)-10.83%
EPS 3Y7.12%
EPS 5Y4.71%
EPS Q2Q%11.38%
Revenue 1Y (TTM)-1.01%
Revenue growth 3Y3.43%
Revenue growth 5Y3.83%
Sales Q2Q%2.69%
3.2 Future
- Based on estimates for the next years, TKR will show a small growth in Earnings Per Share. The EPS will grow by 4.17% on average per year.
- Based on estimates for the next years, TKR will show a small growth in Revenue. The Revenue will grow by 1.65% on average per year.
EPS Next Y-8%
EPS Next 2Y2.12%
EPS Next 3Y4.36%
EPS Next 5Y4.17%
Revenue Next Year-0.43%
Revenue Next 2Y1.42%
Revenue Next 3Y1.97%
Revenue Next 5Y1.65%
3.3 Evolution
- The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 17.68 indicates a rather expensive valuation of TKR.
- TKR's Price/Earnings ratio is rather cheap when compared to the industry. TKR is cheaper than 81.82% of the companies in the same industry.
- TKR's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.32.
- The Price/Forward Earnings ratio is 15.67, which indicates a correct valuation of TKR.
- Based on the Price/Forward Earnings ratio, TKR is valued cheaper than 83.33% of the companies in the same industry.
- TKR is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.32, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.68 | ||
| Fwd PE | 15.67 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, TKR is valued cheaper than 85.61% of the companies in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of TKR indicates a somewhat cheap valuation: TKR is cheaper than 79.55% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.88 | ||
| EV/EBITDA | 9.93 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)3.75
EPS Next 2Y2.12%
EPS Next 3Y4.36%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.49%, TKR has a reasonable but not impressive dividend return.
- TKR's Dividend Yield is rather good when compared to the industry average which is at 0.98. TKR pays more dividend than 82.58% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.83, TKR has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.49% |
5.2 History
- The dividend of TKR has a limited annual growth rate of 4.12%.
- TKR has been paying a dividend for at least 10 years, so it has a reliable track record.
- TKR has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)4.12%
Div Incr Years11
Div Non Decr Years15
5.3 Sustainability
- TKR pays out 32.90% of its income as dividend. This is a sustainable payout ratio.
- The dividend of TKR is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP32.9%
EPS Next 2Y2.12%
EPS Next 3Y4.36%
TIMKEN CO / TKR FAQ
What is the ChartMill fundamental rating of TIMKEN CO (TKR) stock?
ChartMill assigns a fundamental rating of 5 / 10 to TKR.
Can you provide the valuation status for TIMKEN CO?
ChartMill assigns a valuation rating of 5 / 10 to TIMKEN CO (TKR). This can be considered as Fairly Valued.
Can you provide the profitability details for TIMKEN CO?
TIMKEN CO (TKR) has a profitability rating of 5 / 10.
Can you provide the financial health for TKR stock?
The financial health rating of TIMKEN CO (TKR) is 5 / 10.
Can you provide the expected EPS growth for TKR stock?
The Earnings per Share (EPS) of TIMKEN CO (TKR) is expected to decline by -8% in the next year.