TIMKEN CO (TKR) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TKR - US8873891043 - Common Stock
94.53 USD
-0.07 (-0.07%)
We assign a fundamental rating of 5 out of 10 to TKR. TKR was compared to 132 industry peers in the Machinery industry. Both the profitability and the financial health of TKR get a neutral evaluation. Nothing too spectacular is happening here. 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.
- Each year in the past 5 years TKR has 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 4.37%. This is comparable to the rest of the industry: TKR outperforms 56.82% of its industry peers.
- With a Return On Equity value of 9.48%, TKR perfoms like the industry average, outperforming 59.85% of the companies in the same industry.
- Looking at the Return On Invested Capital, with a value of 7.75%, TKR is in line with its industry, outperforming 57.58% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for TKR is in line with the industry average of 10.24%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.37% | ||
| ROE | 9.48% | ||
| ROIC | 7.75% |
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
- TKR's Profit Margin of 6.54% is in line compared to the rest of the industry. TKR outperforms 57.58% of its industry peers.
- TKR's Profit Margin has declined in the last couple of years.
- TKR has a better Operating Margin (13.21%) than 65.15% of its industry peers.
- In the last couple of years the Operating Margin of TKR has remained more or less at the same level.
- Looking at the Gross Margin, with a value of 31.40%, TKR is in line with its industry, outperforming 51.52% 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 | 13.21% | ||
| PM (TTM) | 6.54% | ||
| GM | 31.4% |
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.
- TKR has about the same amout of shares outstanding than it did 1 year ago.
- The number of shares outstanding for TKR has been reduced compared to 5 years ago.
- Compared to 1 year ago, TKR has an improved debt to assets ratio.
2.2 Solvency
- TKR has an Altman-Z score of 2.91. 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.
- The Altman-Z score of TKR (2.91) is comparable to the rest of the industry.
- TKR has a debt to FCF ratio of 5.41. This is a neutral value as TKR would need 5.41 years to pay back of all of its debts.
- TKR has a Debt to FCF ratio (5.41) which is comparable to the rest of the industry.
- A Debt/Equity ratio of 0.67 indicates that TKR is somewhat dependend on debt financing.
- The Debt to Equity ratio of TKR (0.67) is worse than 64.39% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | 5.41 | ||
| Altman-Z | 2.91 |
ROIC/WACC0.83
WACC9.34%
2.3 Liquidity
- TKR has a Current Ratio of 3.11. This indicates that TKR is financially healthy and has no problem in meeting its short term obligations.
- With a decent Current ratio value of 3.11, TKR is doing good in the industry, outperforming 78.03% 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 has a Quick ratio of 1.71. This is in the better half of the industry: TKR outperforms 71.21% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.11 | ||
| Quick Ratio | 1.71 |
3. Growth
3.1 Past
- The earnings per share for TKR have decreased strongly by -10.83% in the last year.
- The Earnings Per Share has been growing slightly by 4.71% on average over the past years.
- Looking at the last year, TKR shows a decrease in Revenue. The Revenue has decreased by -1.01% 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)-10.83%
EPS 3Y7.12%
EPS 5Y4.71%
EPS Q2Q%11.38%
Revenue 1Y (TTM)-1.01%
Revenue growth 3Y3.43%
Revenue growth 5Y3.83%
Sales Q2Q%2.69%
3.2 Future
- TKR is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.17% yearly.
- Based on estimates for the next years, TKR will show a small growth in Revenue. The Revenue will grow by 1.65% on average per year.
EPS Next Y-8%
EPS Next 2Y2.12%
EPS Next 3Y4.36%
EPS Next 5Y4.17%
Revenue Next Year-0.43%
Revenue Next 2Y1.42%
Revenue Next 3Y1.97%
Revenue Next 5Y1.65%
3.3 Evolution
- The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
- 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 17.67, which indicates a rather expensive current valuation of TKR.
- Based on the Price/Earnings ratio, TKR is valued cheaper than 81.82% of the companies in the same industry.
- TKR is valuated rather cheaply when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
- With a Price/Forward Earnings ratio of 15.66, TKR is valued correctly.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of TKR indicates a rather cheap valuation: TKR is cheaper than 83.33% of the companies listed in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.32, TKR is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.67 | ||
| Fwd PE | 15.66 |
4.2 Price Multiples
- 85.61% 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 79.55% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.87 | ||
| EV/EBITDA | 9.93 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)3.75
EPS Next 2Y2.12%
EPS Next 3Y4.36%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.49%, TKR has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 0.98, TKR pays a better dividend. On top of this TKR pays more dividend than 82.58% of the companies listed in the same industry.
- TKR's Dividend Yield is comparable with the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.49% |
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
- TKR pays out 32.90% of its income as dividend. This is a 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.
DP32.9%
EPS Next 2Y2.12%
EPS Next 3Y4.36%
TIMKEN CO / TKR FAQ
What is the ChartMill fundamental rating of TIMKEN CO (TKR) stock?
ChartMill assigns a fundamental rating of 5 / 10 to TKR.
Can you provide the valuation status for TIMKEN CO?
ChartMill assigns a valuation rating of 5 / 10 to TIMKEN CO (TKR). This can be considered as Fairly Valued.
Can you provide the profitability details for TIMKEN CO?
TIMKEN CO (TKR) has a profitability rating of 5 / 10.
Can you provide the financial health for TKR stock?
The financial health rating of TIMKEN CO (TKR) is 5 / 10.
Can you provide the expected EPS growth for TKR stock?
The Earnings per Share (EPS) of TIMKEN CO (TKR) is expected to decline by -8% in the next year.