NYSE:TKR

Stock Analysis Report

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Executive Summary

The Timken Company designs, manufactures, and manages engineered bearings and power transmission products and services worldwide.


Snowflake Analysis

Established dividend payer with proven track record.


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

Stable Share Price: TKR's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

3.1%

TKR

1.6%

US Machinery

1.1%

US Market


1 Year Return

-3.1%

TKR

-6.6%

US Machinery

4.6%

US Market

Return vs Industry: TKR exceeded the US Machinery industry which returned -6.6% over the past year.

Return vs Market: TKR underperformed the US Market which returned 4.6% over the past year.


Shareholder returns

TKRIndustryMarket
7 Day3.1%1.6%1.1%
30 Day17.8%5.2%5.5%
90 Day-3.9%-13.3%-4.9%
1 Year-0.7%-3.1%-4.8%-6.6%7.0%4.6%
3 Year0.1%-7.0%5.0%-1.8%28.6%20.1%
5 Year23.7%8.4%32.1%16.4%52.5%35.3%

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

Valuation

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

9.25x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: TKR ($42.92) is trading above our estimate of fair value ($39.04)

Significantly Below Fair Value: TKR is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: TKR is good value based on its PE Ratio (9.3x) compared to the Machinery industry average (18.7x).

PE vs Market: TKR is good value based on its PE Ratio (9.3x) compared to the US market (15.1x).


Price to Earnings Growth Ratio

PEG Ratio: TKR is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: TKR is good value based on its PB Ratio (1.8x) compared to the US Machinery industry average (1.9x).


Next Steps

Future Growth

How is Timken forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

5.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TKR's forecast earnings growth (5.7% per year) is above the savings rate (2.2%).

Earnings vs Market: TKR's earnings (5.7% per year) are forecast to grow slower than the US market (21.6% per year).

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

Revenue vs Market: TKR's revenue (5.3% per year) is forecast to grow slower than the US market (8.9% per year).

High Growth Revenue: TKR's revenue (5.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TKR's Return on Equity is forecast to be low in 3 years time (14.8%).


Next Steps

Past Performance

How has Timken performed over the past 5 years?

37.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TKR has high quality earnings.

Growing Profit Margin: TKR's current net profit margins (9.4%) are higher than last year (8.6%).


Past Earnings Growth Analysis

Earnings Trend: TKR has become profitable over the past 5 years, growing earnings by 37.4% per year.

Accelerating Growth: TKR's earnings growth over the past year (11.6%) is below its 5-year average (37.4% per year).

Earnings vs Industry: TKR earnings growth over the past year (11.6%) exceeded the Machinery industry -5.7%.


Return on Equity

High ROE: TKR's Return on Equity (19.1%) is considered low.


Next Steps

Financial Health

How is Timken's financial position?


Financial Position Analysis

Short Term Liabilities: TKR's short term assets ($2.1B) exceed its short term liabilities ($769.8M).

Long Term Liabilities: TKR's short term assets ($2.1B) do not cover its long term liabilities ($2.3B).


Debt to Equity History and Analysis

Debt Level: TKR's debt to equity ratio (103.1%) is considered high.

Reducing Debt: TKR's debt to equity ratio has increased from 37.2% to 103.1% over the past 5 years.

Debt Coverage: TKR's debt is well covered by operating cash flow (28.3%).

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


Balance Sheet


Next Steps

Dividend

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

2.61%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: TKR's dividend (2.61%) is higher than the bottom 25% of dividend payers in the US market (1.75%).

High Dividend: TKR's dividend (2.61%) is low compared to the top 25% of dividend payers in the US market (4.71%).


Stability and Growth of Payments

Stable Dividend: TKR's dividends per share have been stable in the past 10 years.

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


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (24.1%), TKR's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TKR's dividends in 3 years are forecast to be well covered by earnings (27.5% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.8yrs

Average management tenure


CEO

Rich Kyle (53yo)

6yrs

Tenure

US$11,879,251

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 ($USD11.88M) is above average for companies of similar size in the US market ($USD5.98M).

Compensation vs Earnings: Rich's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Richard Kyle
President6yrsUS$11.88m0.31% $10.0m
Philip Fracassa
Executive VP & CFO6.17yrsUS$4.08m0.094% $3.0m
Ronald Myers
Executive Vice President of Human Resources2.5yrsUS$1.77m0.037% $1.2m
Christopher Coughlin
Executive VP & Group President6.33yrsUS$4.19m0.15% $4.9m
Richard Boyer
Vice President of Operationsno datano datano data
Shelly Chadwick
VP of Finance & Chief Accounting Officer3.5yrsno data0.0083% $266.1k
Douglas Smith
Vice President of Technology0.58yrno datano data
Neil Frohnapple
Director of Investor Relationsno datano datano data
Hansal Patel
VP, General Counsel & Secretary1yrno data0.0030% $96.7k
Kari Groh
Vice President of Communications & Public Relations10.42yrsno datano data

4.8yrs

Average Tenure

53yo

Average Age

Experienced Management: TKR's management team is considered experienced (4.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Richard Kyle
President6yrsUS$11.88m0.31% $10.0m
Sanjay Koul
Chairman & MD of Indiano datano datano data
Ajita Rajendra
Independent Director5.75yrsUS$232.16k0.021% $690.4k
Frank Sullivan
Independent Director16.5yrsUS$225.51k0.076% $2.4m
Ward Timken
Director18.33yrsUS$203.01k0.78% $25.2m
John Luke
Independent Director21.33yrsUS$221.58k0.086% $2.8m
James Palmer
Independent Director4.75yrsUS$241.18k0.017% $560.0k
John Timken
Independent Chairman6yrsUS$303.01k2% $64.3m
Jacqueline Woods
Independent Director20.33yrsUS$218.01k0.022% $700.8k
Maria Crowe
Independent Director5.5yrsUS$235.96k0.023% $736.5k

7.3yrs

Average Tenure

63yo

Average Age

Experienced Board: TKR's board of directors are considered experienced (7.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

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


Key Information

  • Name: The Timken Company
  • Ticker: TKR
  • Exchange: NYSE
  • Founded: 1899
  • Industry: Industrial Machinery
  • Sector: Capital Goods
  • Market Cap: US$3.222b
  • Shares outstanding: 75.07m
  • Website: https://www.timken.com

Number of Employees


Location

  • The Timken Company
  • 4500 Mount Pleasant Street NW
  • North Canton
  • Ohio
  • 44720-5450
  • 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 designs, manufactures, and manages engineered bearings and power transmission products and services worldwide. It operates in two segments, Mobile Industries and Process Industries. The Mobile Industries segment offers a portfolio of bearings, seals, and lubrication devices and systems, as well as power transmission components, engineered chains, augers, belts, couplings, clutches, brakes, and related products and maintenance services to original equipment manufacturers (OEMs) and end users of off-highway equipment for the agricultural, construction, mining, outdoor power equipment, and power sports markets; and on-highway vehicles, including passenger cars, light trucks, and medium- and heavy-duty trucks, as well as rail cars and locomotives. It also provides power transmission systems and flight-critical components for civil and military aircraft, which comprise bearings, helicopter transmission systems, rotor-head assemblies, turbine engine components, gears, and housings. This segment sells it parts through a network of authorized automotive and heavy-truck distributors to individual end users, equipment owners, operators, and maintenance shops. The Process Industries segment supplies industrial bearings and assemblies; power transmission components, such as gears and gearboxes; and linear motion products, couplings, seals, lubricants, chains, belts, and related products and services to OEMs and end-users in various industries. It also supports aftermarket sales and service needs through its network of authorized industrial distributors; and offers repair and service for bearings and gearboxes, as well as electric motor rewind, repair, and services to end users. The company offers its products under the Timken, Philadelphia Gear, Drives, Cone Drive, Rollon, Lovejoy, Diamond, BEKA, and Groeneveld brands. The company was founded in 1899 and is headquartered in North Canton, Ohio. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/05/27 06:46
End of Day Share Price2020/05/26 00:00
Earnings2020/03/31
Annual Earnings2019/12/31


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.