TIMKEN CO (NYSE:TKR) – A Reliable Dividend Stock Worth Considering

TIMKEN CO (NYSE:TKR) stands out as a solid choice for dividend investors, according to our screening criteria. The company combines a strong dividend profile with reasonable profitability and financial health, making it a candidate for those seeking steady income. Below, we examine why TKR meets these criteria.

Dividend Strength

• Attractive Yield: TKR offers a dividend yield of 1.89%, slightly above the industry average of 1.88%. This places it in the top tier of dividend payers within its sector.
• Reliable Track Record: The company has paid dividends consistently for at least 10 years without reductions, signaling stability.
• Sustainable Payout Ratio: With a payout ratio of 29.53%, TKR retains enough earnings to reinvest in growth while rewarding shareholders.
• Modest Growth: The dividend has grown at an annualized rate of 4.12%, indicating a cautious but steady approach to increasing payouts.

Profitability & Financial Health

• Stable Margins: TKR maintains an operating margin of 12.79%, outperforming 63% of its peers in the machinery industry.
• Solid Liquidity: A current ratio of 3.15 and quick ratio of 1.71 suggest the company can comfortably meet short-term obligations.
• Manageable Debt: While the debt-to-equity ratio of 0.72 is slightly higher than some peers, the company has reduced its debt levels over time.

Valuation

TKR trades at a P/E ratio of 13.92, below both the industry average and the S&P 500, suggesting it is reasonably priced. The forward P/E of 12.29 reinforces this view.

For a deeper dive into TKR’s fundamentals, review the full report here.

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Disclaimer

This is not investment advice. Always conduct your own research before making investment decisions.