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 129 industry peers in the Machinery industry. TKR has only an average score on both its financial health and profitability. TKR is valued correctly, but it does not seem to be growing. TKR also has an excellent dividend rating. These ratings could make TKR a good candidate 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.
TKR had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 5.50%, TKR is in line with its industry, outperforming 60.00% of the companies in the same industry.
TKR's Return On Equity of 12.48% is fine compared to the rest of the industry. TKR outperforms 62.40% of its industry peers.
With a Return On Invested Capital value of 8.35%, TKR perfoms like the industry average, outperforming 60.00% of the companies in the same industry.
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 10.79%.
| 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
The Profit Margin of TKR (7.71%) is better than 63.20% of its industry peers.
In the last couple of years the Profit Margin of TKR has declined.
TKR has a better Operating Margin (13.35%) than 65.60% 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 31.50%, TKR perfoms like the industry average, outperforming 51.20% of the companies in the same industry.
In the last couple of years the Gross Margin of TKR has remained more or less at the same level.
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so TKR is destroying value.
Compared to 1 year ago, TKR has about the same amount of shares outstanding.
Compared to 5 years ago, TKR has less shares outstanding
The debt/assets ratio for TKR has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.84 indicates that TKR is not a great score, but indicates only limited risk for bankruptcy at the moment.
TKR has a Altman-Z score (2.84) which is in line with its industry peers.
TKR has a debt to FCF ratio of 6.75. This is a slightly negative value and a sign of low solvency as TKR would need 6.75 years to pay back of all of its debts.
The Debt to FCF ratio of TKR (6.75) 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 72.80% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.73 | ||
| Debt/FCF | 6.75 | ||
| Altman-Z | 2.84 |
ROIC/WACC0.79
WACC10.63%
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.
Looking at the Current ratio, with a value of 3.07, TKR is in the better half of the industry, outperforming 76.00% of the companies in the same industry.
A Quick Ratio of 1.61 indicates that TKR should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.61, TKR is in the better half of the industry, outperforming 66.40% of the companies in the same industry.
| 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.
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 -4.11%.
TKR shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.83% yearly.
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
Based on estimates for the next years, TKR will show a small growth in Earnings Per Share. The EPS will grow by 7.39% on average per year.
The Revenue is expected to grow by 1.80% on average over the next years.
EPS Next Y0.34%
EPS Next 2Y7.59%
EPS Next 3Y7.39%
EPS Next 5YN/A
Revenue Next Year-1.56%
Revenue Next 2Y1.07%
Revenue Next 3Y1.8%
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
A Price/Earnings ratio of 13.99 indicates a correct valuation of TKR.
Compared to the rest of the industry, the Price/Earnings ratio of TKR indicates a rather cheap valuation: TKR is cheaper than 81.60% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of TKR to the average of the S&P500 Index (29.98), we can say TKR is valued rather cheaply.
The Price/Forward Earnings ratio is 13.94, 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 84.00% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of TKR to the average of the S&P500 Index (22.66), we can say TKR is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.99 | ||
| Fwd PE | 13.94 |
4.2 Price Multiples
80.00% of the companies in the same industry are more expensive than TKR, based on the Enterprise Value to EBITDA ratio.
TKR's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. TKR is cheaper than 78.40% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.58 | ||
| EV/EBITDA | 8.81 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates TKR does not grow enough to justify the current Price/Earnings ratio.
PEG (NY)40.65
PEG (5Y)2.97
EPS Next 2Y7.59%
EPS Next 3Y7.39%
5. Dividend
5.1 Amount
TKR has a Yearly Dividend Yield of 1.72%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 1.74, TKR pays a better dividend. On top of this TKR pays more dividend than 81.60% of the companies listed in the same industry.
Compared to the average S&P500 Dividend Yield of 2.30, TKR is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.72% |
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 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
27.25% 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.
DP27.25%
EPS Next 2Y7.59%
EPS Next 3Y7.39%
81
+1.71 (+2.16%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners89.42%
Inst Owner Change2.16%
Ins Owners5.9%
Ins Owner Change0.42%
Market Cap5.68B
Analysts75
Price Target93.39 (15.3%)
Short Float %3.38%
Short Ratio3.41
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.72% |
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)2.87%
PT rev (3m)5.24%
EPS NQ rev (1m)-15.63%
EPS NQ rev (3m)-17.98%
EPS NY rev (1m)-9.21%
EPS NY rev (3m)-10.23%
Revenue NQ rev (1m)-5.39%
Revenue NQ rev (3m)-6.55%
Revenue NY rev (1m)-4.12%
Revenue NY rev (3m)-4.56%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.99 | ||
| Fwd PE | 13.94 | ||
| P/S | 1.24 | ||
| P/FCF | 18.58 | ||
| P/OCF | 11.94 | ||
| P/B | 2.01 | ||
| P/tB | 13.01 | ||
| EV/EBITDA | 8.81 |
EPS(TTM)5.79
EY7.15%
EPS(NY)5.81
Fwd EY7.17%
FCF(TTM)4.36
FCFY5.38%
OCF(TTM)6.78
OCFY8.38%
SpS65.22
BVpS40.31
TBVpS6.23
PEG (NY)40.65
PEG (5Y)2.97
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 | 2.84 |
F-Score5
WACC10.63%
ROIC/WACC0.79
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 Y0.34%
EPS Next 2Y7.59%
EPS Next 3Y7.39%
EPS Next 5YN/A
Revenue 1Y (TTM)-4.11%
Revenue growth 3Y3.43%
Revenue growth 5Y3.83%
Sales Q2Q%-1.61%
Revenue Next Year-1.56%
Revenue Next 2Y1.07%
Revenue Next 3Y1.8%
Revenue Next 5YN/A
EBIT growth 1Y-13.08%
EBIT growth 3Y5.37%
EBIT growth 5Y3.14%
EBIT Next Year39.08%
EBIT Next 3Y20.16%
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%