As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of The Timken Company (NYSE:TKR), it is a dependable dividend payer with a a great track record of performance, trading at a great value. Below, I’ve touched on some key aspects you should know on a high level. If you’re interested in understanding beyond my broad commentary, read the full report on Timken here.
Very undervalued established dividend payer
TKR delivered a bottom-line expansion of 49% in the prior year, with its most recent earnings level surpassing its average level over the last five years. Not only did TKR outperformed its past performance, its growth also exceeded the Machinery industry expansion, which generated a 31% earnings growth. This is an optimistic signal for the future. TKR’s share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. Investors have the opportunity to buy into the stock to reap capital gains, if TKR’s projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the machinery industry, TKR is also trading below its peers, relative to earnings generated. This supports the theory that TKR is potentially underpriced.
For those seeking income streams from their portfolio, TKR is a robust dividend payer as well. Over the past decade, the company has consistently increased its dividend payout, reaching a yield of 2.6%.
For Timken, there are three fundamental aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for TKR’s future growth? Take a look at our free research report of analyst consensus for TKR’s outlook.
- Financial Health: Are TKR’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of TKR? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.