TIMKEN CO (TKR)

US8873891043 - Common Stock

87.43  -0.71 (-0.81%)

After market: 87.43 0 (0%)

Fundamental Rating

5

We assign a fundamental rating of 5 out of 10 to TKR. TKR was compared to 133 industry peers in the Machinery industry. TKR scores excellent on profitability, but there are concerns on its financial health. TKR is not valued too expensively and it also shows a decent growth rate.



7

1. Profitability

1.1 Basic Checks

TKR had positive earnings in the past year.
TKR had a positive operating cash flow in the past year.
In the past 5 years TKR has always been profitable.
TKR had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

TKR has a Return On Assets of 6.02%. This is in the better half of the industry: TKR outperforms 64.89% of its industry peers.
The Return On Equity of TKR (15.26%) is better than 70.99% of its industry peers.
TKR's Return On Invested Capital of 10.52% is fine compared to the rest of the industry. TKR outperforms 69.47% of its industry peers.
TKR had an Average Return On Invested Capital over the past 3 years of 10.03%. This is in line with the industry average of 10.74%.
The last Return On Invested Capital (10.52%) for TKR is above the 3 year average (10.03%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 6.02%
ROE 15.26%
ROIC 10.52%
ROA(3y)6.74%
ROA(5y)6.66%
ROE(3y)16.43%
ROE(5y)16.38%
ROIC(3y)10.03%
ROIC(5y)9.63%

1.3 Margins

Looking at the Profit Margin, with a value of 8.26%, TKR is in the better half of the industry, outperforming 65.65% of the companies in the same industry.
In the last couple of years the Profit Margin of TKR has remained more or less at the same level.
TKR has a Operating Margin of 14.73%. This is in the better half of the industry: TKR outperforms 76.34% of its industry peers.
TKR's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 31.64%, TKR is doing good in the industry, outperforming 61.07% of the companies in the same industry.
In the last couple of years the Gross Margin of TKR has grown nicely.
Industry RankSector Rank
OM 14.73%
PM (TTM) 8.26%
GM 31.64%
OM growth 3Y2.82%
OM growth 5Y2.8%
PM growth 3Y0.68%
PM growth 5Y-0.46%
GM growth 3Y3.25%
GM growth 5Y1.73%

3

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.
Compared to 1 year ago, TKR has less shares outstanding
The number of shares outstanding for TKR has been reduced compared to 5 years ago.
The debt/assets ratio for TKR is higher compared to a year ago.

2.2 Solvency

TKR has an Altman-Z score of 2.70. 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.
With a Altman-Z score value of 2.70, TKR perfoms like the industry average, outperforming 45.80% of the companies in the same industry.
TKR has a debt to FCF ratio of 6.70. This is a slightly negative value and a sign of low solvency as TKR would need 6.70 years to pay back of all of its debts.
TKR has a Debt to FCF ratio (6.70) which is comparable to the rest of the industry.
TKR has a Debt/Equity ratio of 0.70. This is a neutral value indicating TKR is somewhat dependend on debt financing.
The Debt to Equity ratio of TKR (0.70) is worse than 68.70% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.7
Debt/FCF 6.7
Altman-Z 2.7
ROIC/WACC1.24
WACC8.5%

2.3 Liquidity

A Current Ratio of 1.79 indicates that TKR should not have too much problems paying its short term obligations.
TKR has a worse Current ratio (1.79) than 63.36% of its industry peers.
TKR has a Quick Ratio of 1.79. This is a bad value and indicates that TKR is not financially healthy enough and could expect problems in meeting its short term obligations.
TKR has a worse Quick ratio (0.96) than 67.18% of its industry peers.
Industry RankSector Rank
Current Ratio 1.79
Quick Ratio 0.96

4

3. Growth

3.1 Past

TKR shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 16.61%, which is quite good.
The Earnings Per Share has been growing by 10.93% on average over the past years. This is quite good.
Looking at the last year, TKR shows a small growth in Revenue. The Revenue has grown by 6.06% in the last year.
The Revenue has been growing slightly by 5.90% on average over the past years.
EPS 1Y (TTM)16.61%
EPS 3Y19.63%
EPS 5Y10.93%
EPS growth Q2Q12.3%
Revenue 1Y (TTM)6.06%
Revenue growth 3Y10.72%
Revenue growth 5Y5.9%
Revenue growth Q2Q0.85%

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 3.55% on average per year.
TKR is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.48% yearly.
EPS Next Y-13.04%
EPS Next 2Y-0.66%
EPS Next 3Y3.55%
EPS Next 5YN/A
Revenue Next Year-3.01%
Revenue Next 2Y0.54%
Revenue Next 3Y1.48%
Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less 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.

6

4. Valuation

4.1 Price/Earnings Ratio

TKR is valuated correctly with a Price/Earnings ratio of 12.45.
TKR's Price/Earnings ratio is rather cheap when compared to the industry. TKR is cheaper than 86.26% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.48, TKR is valued rather cheaply.
The Price/Forward Earnings ratio is 14.32, which indicates a correct valuation of TKR.
Based on the Price/Forward Earnings ratio, TKR is valued cheaply inside the industry as 83.21% of the companies are valued more expensively.
TKR is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.79, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 12.45
Fwd PE 14.32

4.2 Price Multiples

80.15% of the companies in the same industry are more expensive than TKR, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, TKR is valued a bit cheaper than the industry average as 76.34% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 17.16
EV/EBITDA 8.94

4.3 Compensation for Growth

The decent profitability rating of TKR may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.14
EPS Next 2Y-0.66%
EPS Next 3Y3.55%

6

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 1.48%, TKR has a reasonable but not impressive dividend return.
TKR's Dividend Yield is a higher than the industry average which is at 1.64.
Compared to the average S&P500 Dividend Yield of 2.34, TKR is paying slightly less dividend.
Industry RankSector Rank
Dividend Yield 1.48%

5.2 History

The dividend of TKR has a limited annual growth rate of 3.39%.
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)3.39%
Div Incr Years10
Div Non Decr Years14

5.3 Sustainability

23.85% of the earnings are spent on dividend by TKR. This is a low number and 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.
DP23.85%
EPS Next 2Y-0.66%
EPS Next 3Y3.55%

TIMKEN CO

NYSE:TKR (3/28/2024, 8:04:00 PM)

After market: 87.43 0 (0%)

87.43

-0.71 (-0.81%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap6.13B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 1.48%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 12.45
Fwd PE 14.32
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)1.14
Profitability
Industry RankSector Rank
ROA 6.02%
ROE 15.26%
ROCE
ROIC
ROICexc
ROICexgc
OM 14.73%
PM (TTM) 8.26%
GM 31.64%
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.73
Health
Industry RankSector Rank
Debt/Equity 0.7
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 1.79
Quick Ratio 0.96
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)16.61%
EPS 3Y19.63%
EPS 5Y
EPS growth Q2Q
EPS Next Y-13.04%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)6.06%
Revenue growth 3Y10.72%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y