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 an average financial health and profitability rating. 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
In the past year TKR was profitable.
TKR had a positive operating cash flow in the past year.
TKR had positive earnings in each of the past 5 years.
In the past 5 years TKR always reported a positive cash flow from operatings.
1.2 Ratios
With a Return On Assets value of 5.50%, TKR perfoms like the industry average, outperforming 58.59% of the companies in the same industry.
The Return On Equity of TKR (12.48%) is better than 61.72% of its industry peers.
The Return On Invested Capital of TKR (8.35%) is better than 60.16% of 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 10.67%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.5% | ||
| ROE | 12.48% | ||
| ROIC | 8.35% |
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 decent Profit Margin value of 7.71%, TKR is doing good in the industry, outperforming 63.28% of the companies in the same industry.
In the last couple of years the Profit Margin of TKR has declined.
TKR has a Operating Margin of 13.35%. This is in the better half of the industry: TKR outperforms 65.63% of its industry peers.
In the last couple of years the Operating Margin of TKR has remained more or less at the same level.
The Gross Margin of TKR (31.50%) 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 | 13.35% | ||
| PM (TTM) | 7.71% | ||
| GM | 31.5% |
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
TKR has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for TKR remains at a similar level compared to 1 year ago.
Compared to 5 years ago, TKR has less shares outstanding
Compared to 1 year ago, TKR has an improved debt to assets ratio.
2.2 Solvency
TKR has an Altman-Z score of 2.61. 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 has a Altman-Z score of 2.61. This is comparable to the rest of the industry: TKR outperforms 42.97% of its industry peers.
The Debt to FCF ratio of TKR is 6.75, which is on the high side as it means it would take TKR, 6.75 years of fcf income to pay off all of its debts.
TKR has a Debt to FCF ratio (6.75) which is comparable to the rest of the industry.
A Debt/Equity ratio of 0.73 indicates that TKR is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.73, TKR is doing worse than 67.19% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.73 | ||
| Debt/FCF | 6.75 | ||
| Altman-Z | 2.61 |
ROIC/WACC0.88
WACC9.54%
2.3 Liquidity
TKR has a Current Ratio of 3.07. This indicates that TKR is financially healthy and has no problem in meeting its short term obligations.
TKR has a Current ratio of 3.07. This is in the better half of the industry: TKR outperforms 75.78% of its industry peers.
TKR has a Quick Ratio of 1.61. This is a normal value and indicates that TKR is financially healthy and should not expect problems in meeting its short term obligations.
TKR has a Quick ratio of 1.61. This is in the better half of the industry: TKR outperforms 65.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.07 | ||
| Quick Ratio | 1.61 |
3. Growth
3.1 Past
The earnings per share for TKR have decreased strongly by -17.52% in the last year.
TKR shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.71% yearly.
Looking at the last year, TKR shows a decrease in Revenue. The Revenue has decreased by -4.11% 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)-17.52%
EPS 3Y7.12%
EPS 5Y4.71%
EPS Q2Q%-15.33%
Revenue 1Y (TTM)-4.11%
Revenue growth 3Y3.43%
Revenue growth 5Y3.83%
Sales Q2Q%-1.61%
3.2 Future
TKR is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.50% yearly.
The Revenue is expected to grow by 1.69% on average over the next years.
EPS Next Y-0.91%
EPS Next 2Y7%
EPS Next 3Y8.5%
EPS Next 5YN/A
Revenue Next Year-2.26%
Revenue Next 2Y0.89%
Revenue Next 3Y1.69%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 10.61, which indicates a very decent valuation of TKR.
86.72% of the companies in the same industry are more expensive than TKR, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 28.29, TKR is valued rather cheaply.
The Price/Forward Earnings ratio is 10.71, which indicates a very decent valuation of TKR.
TKR's Price/Forward Earnings ratio is rather cheap when compared to the industry. TKR is cheaper than 89.06% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.08. TKR is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.61 | ||
| Fwd PE | 10.71 |
4.2 Price Multiples
TKR's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. TKR is cheaper than 82.81% of the companies in the same industry.
78.13% of the companies in the same industry are more expensive than TKR, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.1 | ||
| EV/EBITDA | 7.17 |
4.3 Compensation for Growth
The decent profitability rating of TKR may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.25
EPS Next 2Y7%
EPS Next 3Y8.5%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.21%, TKR has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.12, TKR pays a better dividend. On top of this TKR pays more dividend than 83.59% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.52, TKR has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.21% |
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 27.25% of its income as dividend. This is a sustainable payout ratio.
TKR's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP27.25%
EPS Next 2Y7%
EPS Next 3Y8.5%
61.42
+0.45 (+0.74%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners89.42%
Inst Owner Change0%
Ins Owners5.9%
Ins Owner Change4.02%
Market Cap4.31B
Analysts76.25
Price Target94.07 (53.16%)
Short Float %3.25%
Short Ratio3.13
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.21% |
Yearly Dividend1.37
Dividend Growth(5Y)4.12%
DP27.25%
Div Incr Years11
Div Non Decr Years15
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.29%
Min EPS beat(2)-11.49%
Max EPS beat(2)16.07%
EPS beat(4)3
Avg EPS beat(4)5.24%
Min EPS beat(4)-11.49%
Max EPS beat(4)16.07%
EPS beat(8)5
Avg EPS beat(8)4.18%
EPS beat(12)9
Avg EPS beat(12)9.83%
EPS beat(16)10
Avg EPS beat(16)6.93%
Revenue beat(2)0
Avg Revenue beat(2)-0.26%
Min Revenue beat(2)-0.32%
Max Revenue beat(2)-0.19%
Revenue beat(4)1
Avg Revenue beat(4)0.24%
Min Revenue beat(4)-1.06%
Max Revenue beat(4)2.52%
Revenue beat(8)3
Avg Revenue beat(8)-0.4%
Revenue beat(12)5
Avg Revenue beat(12)-0.08%
Revenue beat(16)9
Avg Revenue beat(16)0.37%
PT rev (1m)-0.6%
PT rev (3m)2.58%
EPS NQ rev (1m)-0.8%
EPS NQ rev (3m)-19.03%
EPS NY rev (1m)-1.25%
EPS NY rev (3m)-11.16%
Revenue NQ rev (1m)-0.09%
Revenue NQ rev (3m)-6.63%
Revenue NY rev (1m)-0.71%
Revenue NY rev (3m)-5.2%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.61 | ||
| Fwd PE | 10.71 | ||
| P/S | 0.94 | ||
| P/FCF | 14.1 | ||
| P/OCF | 9.06 | ||
| P/B | 1.53 | ||
| P/tB | 9.87 | ||
| EV/EBITDA | 7.17 |
EPS(TTM)5.79
EY9.43%
EPS(NY)5.74
Fwd EY9.34%
FCF(TTM)4.36
FCFY7.09%
OCF(TTM)6.78
OCFY11.04%
SpS65.16
BVpS40.28
TBVpS6.22
PEG (NY)N/A
PEG (5Y)2.25
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.5% | ||
| ROE | 12.48% | ||
| ROCE | 10.92% | ||
| ROIC | 8.35% | ||
| ROICexc | 8.97% | ||
| ROICexgc | 16.6% | ||
| OM | 13.35% | ||
| PM (TTM) | 7.71% | ||
| GM | 31.5% | ||
| FCFM | 6.68% |
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 Turnover0.71
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.73 | ||
| Debt/FCF | 6.75 | ||
| Debt/EBITDA | 2.46 | ||
| Cap/Depr | 76.65% | ||
| Cap/Sales | 3.72% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 57.14% | ||
| Profit Quality | 86.67% | ||
| Current Ratio | 3.07 | ||
| Quick Ratio | 1.61 | ||
| Altman-Z | 2.61 |
F-Score5
WACC9.54%
ROIC/WACC0.88
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)-17.52%
EPS 3Y7.12%
EPS 5Y4.71%
EPS Q2Q%-15.33%
EPS Next Y-0.91%
EPS Next 2Y7%
EPS Next 3Y8.5%
EPS Next 5YN/A
Revenue 1Y (TTM)-4.11%
Revenue growth 3Y3.43%
Revenue growth 5Y3.83%
Sales Q2Q%-1.61%
Revenue Next Year-2.26%
Revenue Next 2Y0.89%
Revenue Next 3Y1.69%
Revenue Next 5YN/A
EBIT growth 1Y-13.08%
EBIT growth 3Y5.37%
EBIT growth 5Y3.14%
EBIT Next Year31.68%
EBIT Next 3Y14.68%
EBIT Next 5YN/A
FCF growth 1Y-14.47%
FCF growth 3Y8.55%
FCF growth 5Y-5.68%
OCF growth 1Y-12.75%
OCF growth 3Y7.09%
OCF growth 5Y-2.86%