Timken (TKR) versus Its Competitors Financial Comparison

Timken (NYSE:TKR) is one of 436 public companies in the “Machinery” industry, but how does it weigh in compared to its peers? We will compare Timken to related companies based on the strength of its institutional ownership, dividends, profitability, valuation, analyst recommendations, earnings and risk.

Dividends

Timken pays an annual dividend of $1.44 per share and has a dividend yield of 1.3%. Timken pays out 35.6% of its earnings in the form of a dividend. As a group, “Machinery” companies pay a dividend yield of 2.8% and pay out 24.6% of their earnings in the form of a dividend. Timken has raised its dividend for 12 consecutive years. Timken lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Insider and Institutional Ownership

89.1% of Timken shares are owned by institutional investors. Comparatively, 51.8% of shares of all “Machinery” companies are owned by institutional investors. 8.1% of Timken shares are owned by insiders. Comparatively, 14.1% of shares of all “Machinery” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Timken and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Timken	0	3	7	0	2.70
Timken Competitors	4206	14713	18234	808	2.41

Timken presently has a consensus price target of $141.90, indicating a potential upside of 30.42%. As a group, “Machinery” companies have a potential upside of 32.57%. Given Timken’s peers higher possible upside, analysts clearly believe Timken has less favorable growth aspects than its peers.

Profitability

This table compares Timken and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Timken	5.88%	13.13%	6.52%
Timken Competitors	-1,039.03%	-14.89%	0.54%

Risk and Volatility

Timken has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500. Comparatively, Timken’s peers have a beta of 5.12, indicating that their average stock price is 412% more volatile than the S&P 500.

Earnings and Valuation

This table compares Timken and its peers top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Timken	$4.81 billion	$288.40 million	26.93
Timken Competitors	$4.79 billion	$362.65 million	5.89

Timken has higher revenue, but lower earnings than its peers. Timken is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Summary

Timken beats its peers on 8 of the 15 factors compared.

Timken Company Profile

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.