TIMKEN CO (TKR) Stock Fundamental Analysis
NYSE:TKR - New York Stock Exchange, Inc. - US8873891043 - Common Stock - Currency: USD
TKR gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 128 industry peers in the Machinery industry. TKR has only an average score on both its financial health and profitability. TKR has a valuation in line with the averages, 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
In the past year TKR was profitable.
In the past year TKR had a positive cash flow from operations.
In the past 5 years TKR has always been profitable.
In the past 5 years TKR always reported a positive cash flow from operatings.
1.2 Ratios
TKR's Return On Assets of 4.98% is in line compared to the rest of the industry. TKR outperforms 53.13% of its industry peers.
Looking at the Return On Equity, with a value of 11.22%, TKR is in line with its industry, outperforming 59.38% of the companies in the same industry.
TKR has a Return On Invested Capital (7.71%) which is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for TKR is in line with the industry average of 10.71%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.98% | ||
| ROE | 11.22% | ||
| ROIC | 7.71% |
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
Looking at the Profit Margin, with a value of 7.24%, TKR is in line with its industry, outperforming 59.38% of the companies in the same industry.
TKR's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 12.79%, TKR is in the better half of the industry, outperforming 63.28% of the companies in the same industry.
TKR's Operating Margin has been stable in the last couple of years.
TKR has a Gross Margin (30.99%) which is comparable to the rest of the industry.
TKR's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.79% | ||
| PM (TTM) | 7.24% | ||
| GM | 30.99% |
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.
The number of shares outstanding for TKR remains at a similar level compared to 1 year ago.
The number of shares outstanding for TKR has been reduced compared to 5 years ago.
The debt/assets ratio for TKR has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.73 indicates that TKR is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.73, TKR perfoms like the industry average, outperforming 42.19% of the companies in the same industry.
TKR has a debt to FCF ratio of 6.57. This is a slightly negative value and a sign of low solvency as TKR would need 6.57 years to pay back of all of its debts.
TKR has a Debt to FCF ratio of 6.57. This is comparable to the rest of the industry: TKR outperforms 46.88% of its industry peers.
TKR has a Debt/Equity ratio of 0.72. This is a neutral value indicating TKR is somewhat dependend on debt financing.
TKR's Debt to Equity ratio of 0.72 is on the low side compared to the rest of the industry. TKR is outperformed by 69.53% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | 6.57 | ||
| Altman-Z | 2.73 |
ROIC/WACC0.82
WACC9.35%
2.3 Liquidity
TKR has a Current Ratio of 3.15. This indicates that TKR is financially healthy and has no problem in meeting its short term obligations.
With a decent Current ratio value of 3.15, TKR is doing good in the industry, outperforming 78.91% of the companies in the same industry.
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.
TKR's Quick ratio of 1.71 is fine compared to the rest of the industry. TKR outperforms 71.09% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.15 | ||
| 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 -19.10%.
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.
TKR shows a decrease in Revenue. In the last year, the revenue decreased by -3.69%.
The Revenue has been growing slightly by 3.83% on average over the past years.
EPS 1Y (TTM)-19.1%
EPS 3Y7.12%
EPS 5Y4.71%
EPS Q2Q%-20.9%
Revenue 1Y (TTM)-3.69%
Revenue growth 3Y3.43%
Revenue growth 5Y3.83%
Sales Q2Q%-4.2%
3.2 Future
The Earnings Per Share is expected to grow by 5.92% on average over the next years.
The Revenue is expected to grow by 1.85% on average over the next years.
EPS Next Y-8.02%
EPS Next 2Y2.96%
EPS Next 3Y5.92%
EPS Next 5YN/A
Revenue Next Year-1.82%
Revenue Next 2Y0.77%
Revenue Next 3Y1.85%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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
With a Price/Earnings ratio of 14.15, TKR is valued correctly.
Based on the Price/Earnings ratio, TKR is valued cheaper than 85.16% of the companies in the same industry.
TKR is valuated rather cheaply when we compare the Price/Earnings ratio to 27.45, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 12.49, which indicates a correct valuation of TKR.
TKR's Price/Forward Earnings ratio is rather cheap when compared to the industry. TKR is cheaper than 82.81% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of TKR to the average of the S&P500 Index (21.90), we can say TKR is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.15 | ||
| Fwd PE | 12.49 |
4.2 Price Multiples
81.25% of the companies in the same industry are more expensive than TKR, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TKR indicates a somewhat cheap valuation: TKR is cheaper than 73.44% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.56 | ||
| EV/EBITDA | 8.85 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)3
EPS Next 2Y2.96%
EPS Next 3Y5.92%
5. Dividend
5.1 Amount
TKR has a Yearly Dividend Yield of 1.83%.
Compared to an average industry Dividend Yield of 1.87, TKR pays a better dividend. On top of this TKR pays more dividend than 82.81% of the companies listed in the same industry.
TKR's Dividend Yield is slightly below the S&P500 average, which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.83% |
5.2 History
The dividend of TKR has a limited annual growth rate of 4.12%.
TKR has paid a dividend for at least 10 years, which is a reliable track record.
TKR has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)4.12%
Div Incr Years11
Div Non Decr Years15
5.3 Sustainability
29.53% of the earnings are spent on dividend by TKR. This is a low number and sustainable payout ratio.
TKR's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP29.53%
EPS Next 2Y2.96%
EPS Next 3Y5.92%
76.67
-0.05 (-0.07%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners92.73%
Inst Owner Change1.33%
Ins Owners4.93%
Ins Owner Change6.85%
Market Cap5.36B
Analysts72.5
Price Target79.05 (3.1%)
Short Float %4.46%
Short Ratio4.66
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.83% |
Yearly Dividend1.37
Dividend Growth(5Y)4.12%
DP29.53%
Div Incr Years11
Div Non Decr Years15
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)5.9%
Min EPS beat(2)-4.26%
Max EPS beat(2)16.07%
EPS beat(4)2
Avg EPS beat(4)0.22%
Min EPS beat(4)-11.49%
Max EPS beat(4)16.07%
EPS beat(8)4
Avg EPS beat(8)2.46%
EPS beat(12)8
Avg EPS beat(12)6.36%
EPS beat(16)9
Avg EPS beat(16)5.8%
Revenue beat(2)1
Avg Revenue beat(2)-0.14%
Min Revenue beat(2)-0.32%
Max Revenue beat(2)0.03%
Revenue beat(4)1
Avg Revenue beat(4)-0.39%
Min Revenue beat(4)-1.06%
Max Revenue beat(4)0.03%
Revenue beat(8)3
Avg Revenue beat(8)-0.64%
Revenue beat(12)6
Avg Revenue beat(12)-0.08%
Revenue beat(16)9
Avg Revenue beat(16)0.15%
PT rev (1m)0.72%
PT rev (3m)-16.47%
EPS NQ rev (1m)-0.96%
EPS NQ rev (3m)-9.11%
EPS NY rev (1m)-1.11%
EPS NY rev (3m)-7.17%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.61%
Revenue NY rev (1m)-0.53%
Revenue NY rev (3m)-0.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.15 | ||
| Fwd PE | 12.49 | ||
| P/S | 1.19 | ||
| P/FCF | 16.56 | ||
| P/OCF | 11.06 | ||
| P/B | 1.84 | ||
| P/tB | 10.97 | ||
| EV/EBITDA | 8.85 |
EPS(TTM)5.42
EY7.07%
EPS(NY)6.14
Fwd EY8.01%
FCF(TTM)4.63
FCFY6.04%
OCF(TTM)6.93
OCFY9.04%
SpS64.65
BVpS41.71
TBVpS6.99
PEG (NY)N/A
PEG (5Y)3
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.98% | ||
| ROE | 11.22% | ||
| ROCE | 10.08% | ||
| ROIC | 7.71% | ||
| ROICexc | 8.27% | ||
| ROICexgc | 15.15% | ||
| OM | 12.79% | ||
| PM (TTM) | 7.24% | ||
| GM | 30.99% | ||
| FCFM | 7.16% |
ROA(3y)6.19%
ROA(5y)6.27%
ROE(3y)15.23%
ROE(5y)15%
ROIC(3y)9.74%
ROIC(5y)9.38%
ROICexc(3y)10.58%
ROICexc(5y)10.18%
ROICexgc(3y)19.94%
ROICexgc(5y)18.77%
ROCE(3y)12.82%
ROCE(5y)12.4%
ROICexcg growth 3Y-1.39%
ROICexcg growth 5Y-2.05%
ROICexc growth 3Y-3.49%
ROICexc growth 5Y-2.51%
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%
F-Score5
Asset Turnover0.69
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | 6.57 | ||
| Debt/EBITDA | 2.63 | ||
| Cap/Depr | 72.7% | ||
| Cap/Sales | 3.56% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 60.6% | ||
| Profit Quality | 98.9% | ||
| Current Ratio | 3.15 | ||
| Quick Ratio | 1.71 | ||
| Altman-Z | 2.73 |
F-Score5
WACC9.35%
ROIC/WACC0.82
Cap/Depr(3y)92.91%
Cap/Depr(5y)87.97%
Cap/Sales(3y)3.87%
Cap/Sales(5y)3.73%
Profit Quality(3y)82.47%
Profit Quality(5y)94.49%
High Growth Momentum
Growth
EPS 1Y (TTM)-19.1%
EPS 3Y7.12%
EPS 5Y4.71%
EPS Q2Q%-20.9%
EPS Next Y-8.02%
EPS Next 2Y2.96%
EPS Next 3Y5.92%
EPS Next 5YN/A
Revenue 1Y (TTM)-3.69%
Revenue growth 3Y3.43%
Revenue growth 5Y3.83%
Sales Q2Q%-4.2%
Revenue Next Year-1.82%
Revenue Next 2Y0.77%
Revenue Next 3Y1.85%
Revenue Next 5YN/A
EBIT growth 1Y-14.01%
EBIT growth 3Y5.37%
EBIT growth 5Y3.14%
EBIT Next Year26.61%
EBIT Next 3Y13.17%
EBIT Next 5YN/A
FCF growth 1Y-9.47%
FCF growth 3Y8.55%
FCF growth 5Y-5.68%
OCF growth 1Y-10.78%
OCF growth 3Y7.09%
OCF growth 5Y-2.86%