DB:TKH

Stock Analysis Report

Executive Summary

The Timken Company engineers, manufactures, and markets engineered bearings and power transmission products worldwide.

Snowflake

Fundamentals

Average dividend payer and fair value.


Similar Companies

Share Price & News

How has Timken's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

2.6%

TKH

1.1%

DE Machinery

1.7%

DE Market


1 Year Return

14.0%

TKH

-12.6%

DE Machinery

7.2%

DE Market

Return vs Industry: TKH exceeded the German Machinery industry which returned -12.6% over the past year.

Return vs Market: TKH exceeded the German Market which returned 7.2% over the past year.


Shareholder returns

TKHIndustryMarket
7 Day2.6%1.1%1.7%
30 Day0.08%-3.8%2.4%
90 Day-9.0%-4.6%2.3%
1 Year17.0%14.0%-9.8%-12.6%10.6%7.2%
3 Year36.6%26.8%-16.0%-22.1%18.4%8.1%
5 Year40.9%23.3%19.9%5.8%42.3%22.9%

Price Volatility Vs. Market

How volatile is Timken's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Timken undervalued compared to its fair value and its price relative to the market?

38.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TKH (€40) is trading below our estimate of fair value (€64.85)

Significantly Below Fair Value: TKH is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: TKH is good value based on its PE Ratio (10.8x) compared to the Machinery industry average (13.5x).

PE vs Market: TKH is good value based on its PE Ratio (10.8x) compared to the German market (19x).


Price to Earnings Growth Ratio

PEG Ratio: TKH is poor value based on its PEG Ratio (1.2x)


Price to Book Ratio

PB vs Industry: TKH is overvalued based on its PB Ratio (2x) compared to the DE Machinery industry average (1.4x).


Next Steps

Future Growth

How is Timken forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

8.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TKH's forecast earnings growth (8.9% per year) is above the savings rate (0.2%).

Earnings vs Market: TKH's earnings (8.9% per year) are forecast to grow slower than the German market (12.7% per year).

High Growth Earnings: TKH's earnings are forecast to grow, but not significantly.

Revenue vs Market: TKH's revenue (1.2% per year) is forecast to grow slower than the German market (5% per year).

High Growth Revenue: TKH's revenue (1.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TKH's Return on Equity is forecast to be low in 3 years time (18%).


Next Steps

Past Performance

How has Timken performed over the past 5 years?

29.0%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: TKH's earnings have grown significantly by 29% per year over the past 5 years.

Accelerating Growth: TKH's earnings growth over the past year (24.5%) is below its 5-year average (29% per year).

Earnings vs Industry: TKH earnings growth over the past year (24.5%) exceeded the Machinery industry -11.2%.


Return on Equity

High ROE: TKH's Return on Equity (18.1%) is considered low.


Return on Assets

ROA vs Industry: TKH has a higher Return on Assets than the Machinery industry average last year.


Return on Capital Employed

ROCE Improving: TKH has not improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Timken's financial position?


Financial Position Analysis

Short Term Liabilities: TKH's short term assets ($1.9B) exceeds its short term liabilities ($696.3M)

Long Term Liabilities: TKH's short term assets (1.9B) do not cover its long term liabilities (2.2B)


Debt to Equity History and Analysis

Debt Level: TKH's debt to equity ratio (94.5%) is considered high

Reducing Debt: TKH's debt to equity ratio has increased from 27.3% to 94.5% over the past 5 years.

Debt Coverage: TKH's debt is well covered by operating cash flow (28.7%).

Interest Coverage: TKH's interest payments on its debt are well covered by EBIT (7.9x coverage).


Balance Sheet

Inventory Level: TKH has a high level of physical assets or inventory.

Debt Coverage by Assets: TKH's debt is covered by short term assets (assets are 1.107170x debt).


Next Steps

Dividend

What is Timken's current dividend yield, its reliability and sustainability?

2.51%

Current Dividend Yield


Dividend Yield vs Market

company2.5%marketbottom25%1.5%markettop25%3.8%industryaverage2.4%forecastin3Years2.7%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: TKH's dividend (2.51%) is higher than the bottom 25% of dividend payers in the German market (1.48%).

High Dividend: TKH's dividend (2.51%) is low compared to the top 25% of dividend payers in the German market (3.83%).

Stable Dividend: TKH's dividend payments have been volatile in the past 10 years.

Growing Dividend: TKH's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (27.1%), TKH's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TKH's dividends in 3 years are forecast to be well covered by earnings (22.8% payout ratio).


Next Steps

Management

What is the CEO of Timken's salary, the management and board of directors tenure and is there insider trading?

4.5yrs

Average management tenure


CEO

Rich Kyle (53yo)

5.4yrs

Tenure

US$8,720,272

Compensation

Mr. Richard G. Kyle, also known as Rich, has been the Chief Executive Officer and President of The Timken Company since May 2014. Mr. Kyle served as the Chief Operating Officer of Bearings & Power Transmis ...


CEO Compensation Analysis

Compensation vs. Market: Rich's total compensation ($USD8.72M) is about average for companies of similar size in the German market ($USD2.95M).

Compensation vs Earnings: Rich's compensation has been consistent with company performance over the past year.


Management Age and Tenure

4.5yrs

Average Tenure

55.5yo

Average Age

Experienced Management: TKH's management team is considered experienced (4.5 years average tenure).


Board Age and Tenure

6.8yrs

Average Tenure

63yo

Average Age

Experienced Board: TKH's board of directors are considered experienced (6.8 years average tenure).


Insider Trading

Insider Buying: TKH insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$171,48028 Aug 19
John Timken
EntityIndividual
Role
Chairman of the Board
Independent Chairman
Shares5,000
Max PriceUS$34.30
SellUS$110,29607 May 19
Shelly Chadwick
EntityIndividual
Role
Chief Accounting Officer
VP of Finance & Chief Accounting Officer
Shares2,400
Max PriceUS$45.96
SellUS$372,28507 May 19
Ronald Myers
EntityIndividual
Role
Head of Human Resources
Executive Vice President of Human Resources
Shares8,168
Max PriceUS$45.61
BuyUS$180,00406 Nov 18
Frank Sullivan
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,000
Max PriceUS$36.00

Ownership Breakdown


Management Team

  • Philip Fracassa (51yo)

    Executive VP & CFO

    • Tenure: 5.6yrs
    • Compensation: US$2.65m
  • Michael Connors

    Vice President of Global Marketing

    • Tenure: 3.6yrs
  • Christopher Coughlin (58yo)

    Executive VP & Group President

    • Tenure: 5.8yrs
    • Compensation: US$2.63m
  • Rich Kyle (53yo)

    President

    • Tenure: 5.4yrs
    • Compensation: US$8.72m
  • Kari Groh

    Vice President of Communications & Public Relations

    • Tenure: 9.8yrs
  • Ronald Myers (60yo)

    Executive Vice President of Human Resources

    • Tenure: 1.9yrs
    • Compensation: US$1.33m
  • Richard Boyer

    Vice President of Operations

    • Tenure: 0yrs
  • Shelly Chadwick

    VP of Finance & Chief Accounting Officer

    • Tenure: 2.9yrs
  • Jason Hershiser

    Manager of Investor Relations

    • Tenure: 0yrs
  • Hansal Patel

    Vice President of Legal & Corporate Secretary

    • Tenure: 0.4yrs

Board Members

  • Ajita Rajendra (67yo)

    Independent Director

    • Tenure: 5.2yrs
    • Compensation: US$226.76k
  • Frank Sullivan (58yo)

    Independent Director

    • Tenure: 15.9yrs
    • Compensation: US$240.69k
  • Tim Timken (51yo)

    Director

    • Tenure: 17.8yrs
    • Compensation: US$203.19k
  • John Luke (70yo)

    Independent Director

    • Tenure: 20.8yrs
    • Compensation: US$228.19k
  • James Palmer (69yo)

    Independent Director

    • Tenure: 4.2yrs
    • Compensation: US$227.19k
  • John Timken (67yo)

    Independent Chairman

    • Tenure: 5.4yrs
    • Compensation: US$303.19k
  • Jacqueline Woods (71yo)

    Independent Director

    • Tenure: 19.8yrs
    • Compensation: US$218.19k
  • Rich Kyle (53yo)

    President

    • Tenure: 5.4yrs
    • Compensation: US$8.72m
  • Maria Crowe (59yo)

    Independent Director

    • Tenure: 4.9yrs
    • Compensation: US$219.48k
  • Sanjay Koul (54yo)

    Chairman & MD of India

    • Tenure: 0yrs

Company Information

The Timken Company's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The Timken Company
  • Ticker: TKH
  • Exchange: DB
  • Founded: 1899
  • Industry: Industrial Machinery
  • Sector: Capital Goods
  • Market Cap: US$3.391b
  • Listing Market Cap: US$3.043b
  • Shares outstanding: 76.04m
  • Website: https://www.timken.com

Number of Employees


Location

  • The Timken Company
  • 4500 Mount Pleasant Street NW
  • North Canton
  • Ohio
  • 44720
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TKRNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
TKHDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
TKR *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968

Biography

The Timken Company engineers, manufactures, and markets engineered bearings and power transmission products worldwide. It operates in two segments, Mobile Industries and Process Industries. The Mobile Indu ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/22 20:31
End of Day Share Price2019/10/22 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.