Timken (NYSE:TKR) & Kawasaki Heavy Industries (OTCMKTS:KWHIY) Head-To-Head Review

Timken (NYSE:TKR) and Kawasaki Heavy Industries (OTCMKTS:KWHIY) are both industrials companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, dividends, institutional ownership and risk.

Institutional and Insider Ownership

89.1% of Timken shares are owned by institutional investors. 8.1% of Timken shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Timken has a beta of 1.21, meaning that its stock price is 21% more volatile than the S&P 500. Comparatively, Kawasaki Heavy Industries has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for Timken and Kawasaki Heavy Industries, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Timken	0	3	7	0	2.70
Kawasaki Heavy Industries	0	3	0	0	2.00

Timken presently has a consensus price target of $145.50, suggesting a potential upside of 24.75%. Given Timken’s stronger consensus rating and higher possible upside, equities analysts clearly believe Timken is more favorable than Kawasaki Heavy Industries.

Dividends

Timken pays an annual dividend of $1.44 per share and has a dividend yield of 1.2%. Kawasaki Heavy Industries pays an annual dividend of $0.06 per share and has a dividend yield of 1.0%. Timken pays out 39.0% of its earnings in the form of a dividend. Kawasaki Heavy Industries pays out 23.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Timken has increased its dividend for 12 consecutive years. Timken is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Timken and Kawasaki Heavy Industries”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Timken	$4.58 billion	1.76	$288.40 million	$3.69	31.61
Kawasaki Heavy Industries	$15.35 billion	0.86	$713.84 million	$0.26	23.25

Kawasaki Heavy Industries has higher revenue and earnings than Timken. Kawasaki Heavy Industries is trading at a lower price-to-earnings ratio than Timken, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Timken and Kawasaki Heavy Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Timken	5.43%	12.63%	6.21%
Kawasaki Heavy Industries	4.74%	13.40%	3.49%

Summary

Timken beats Kawasaki Heavy Industries on 13 of the 17 factors compared between the two stocks.

About Timken

The Timken Company designs, manufactures, and sells engineered bearings and industrial motion products, and related services in the United States and internationally. The company's Engineered Bearings segment provides various bearing products, including tapered, spherical, and cylindrical roller bearings; plain bearings, metal-polymer bearings, and rod end bearings; radial, angular, and precision ball bearings; thrust and specialty ball bearings; journal bearings; and housed or mounted bearings. This segment serves wind energy, agriculture, construction, food and beverage, metals and mining, automotive and truck, aerospace, rail, and other industries under the Timken, GGB, and Fafnir brands. Its Industrial Motion segment offers a portfolio of engineered products comprising industrial drives, automatic lubrication systems, linear motion products and systems, chains, belts, seals, couplings, filtration systems, and industrial clutches and brakes. It also provides industrial drivetrain and bearing repairing services. This segment serves a range of industries, such as solar energy, automation, construction, agriculture and turf, passenger rail, marine, aerospace, packaging and logistics, medical, and others under the Philadelphia Gear, Cone Drive, Rollon, Nadella, Groeneveld, BEKA, Diamond, Drives, Timken Belts, Spinea, Des-Case, Lagersmit, Lovejoy, and PT Tech brands. The Timken Company was founded in 1899 and is headquartered in North Canton, Ohio.

About Kawasaki Heavy Industries

Kawasaki Heavy Industries, Ltd. engages in aerospace systems, energy solution and marine engineering, precision machinery and robot, rolling stock, and motorcycle and engine businesses in Japan and internationally. It manufactures aircraft for the Japan ministry of defense; helicopters; and helicopter and jet engines for commercial aircrafts. The company also manufactures railway cars; a range of rolling stocks, including Shinkansen, electric cars, passenger coaches, freight cars, locomotives, diesel locomotives, and transit systems. In addition, it engages in the production and sale of energy-related machinery and systems, marine machinery and systems, industrial equipment, and environmental equipment. Further, the company manufactures and supplies motorcycles, off-road four wheelers, watercrafts, general-purpose gasoline engines, etc. Additionally, it manufactures and sells pumps, motors, valves, and various hydraulic machinery, as well as assembles hydraulic systems; and industrial robots for use in welding, assembly, handling, painting, and palletization for various industries, including automotive and electronics industries. The company was founded in 1878 and is headquartered in Tokyo, Japan.