NYSE:TKR

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Very undervalued average dividend payer.

Risks

  • Timken has significant price volatility in the past 3 months.

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

-3.6%

NYSE:TKR

-1.8%

US Machinery

-1.0%

US Market


1 Year Return

-16.3%

NYSE:TKR

-7.4%

US Machinery

-0.4%

US Market

TKR underperformed the Machinery industry which returned -8.5% over the past year.

TKR underperformed the Market in United States of America which returned -1.7% over the past year.


Share holder returns

TKRIndustryMarket
7 Day-3.6%-1.8%-1.0%
30 Day-16.6%-7.9%-3.3%
90 Day-14.2%-3.0%0.4%
1 Year-14.6%-16.3%-5.5%-7.4%1.8%-0.4%
3 Year26.7%18.4%35.4%26.6%39.4%30.4%
5 Year-0.8%-12.5%36.2%19.4%54.2%37.1%

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 based on future cash flows and its price relative to the stock market?

45%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Timken's share price is below the future cash flow value, and at a moderate discount (> 20%).

Timken's share price is below the future cash flow value, and at a substantial discount (> 40%).


Price Based on Earnings

Timken is good value based on earnings compared to the US Machinery industry average.

Timken is good value based on earnings compared to the United States of America market.


Price Based on Expected Growth

Timken is good value based on expected growth next year.


Price Based on Value of Assets

Timken is good value based on assets compared to the US Machinery industry average.


Next Steps

Future Growth

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

10.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Timken's revenue is expected to grow by 1.3% yearly, however this is not considered high growth (20% yearly).

Timken's earnings are expected to grow by 10.8% yearly, however this is not considered high growth (20% yearly).

Timken's revenue growth is positive but not above the United States of America market average.

Timken's earnings growth is positive but not above the United States of America market average.

Timken's earnings growth is expected to exceed the low risk savings rate of 2.7%.


Earnings per Share Growth Estimates


Future Return on Equity

Timken is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


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

Timken has delivered over 20% year on year earnings growth in the past 5 years.

Timken's 1-year earnings growth is less than its 5-year average (24.5% vs 29%)

Timken's earnings growth has exceeded the US Machinery industry average in the past year (24.5% vs 17.5%).


Return on Equity

Timken has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

Timken used its assets more efficiently than the US Machinery industry average last year based on Return on Assets.


Return on Capital Employed

Timken's use of capital has not improved over the past 3 years (Return on Capital Employed).


Next Steps

Financial Health

How is Timken's financial position?


Financial Position Analysis

Timken is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

Timken's long term commitments exceed its cash and other short term assets.


Debt to Equity History and Analysis

Timken's level of debt (94.5%) compared to net worth is high (greater than 40%).

The level of debt compared to net worth has increased over the past 5 years (27.3% vs 94.5% today).

Debt is well covered by operating cash flow (28.7%, greater than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 7.9x coverage).


Balance Sheet

High level of physical assets or inventory.

Debt is covered by short term assets, assets are 1.1x debt.


Next Steps

Dividend

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

2.80%

Expected Dividend Yield


Upcoming Dividend Payment

Purchase Timken before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield and Payments Analysis

Timken's pays a higher dividend yield than the bottom 25% of dividend payers in United States of America (1.5%).

Timken's dividend is below the markets top 25% of dividend payers in United States of America (3.9%).

Dividends per share have been volatile in the past 10 years (annual drop of over 20%).

Dividends per share have increased over the past 10 years.


Current Payout to Shareholders

Dividends paid are well covered by earnings (3.7x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be well covered by earnings (4.9x coverage).


Next Steps

Management

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

4.3yrs

Average management tenure


CEO

Rich Kyle (53yo)

5.3yrs

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

Rich's remuneration is higher than average for companies of similar size in United States of America.

Rich's compensation has been consistent with company performance over the past year, both up more than 20%.


Management Age and Tenure

4.3yrs

Average Tenure

55.5yo

Average Age

The tenure for the Timken management team is about average.


Board Age and Tenure

6.6yrs

Average Tenure

63yo

Average Age

The tenure for the Timken board of directors is about average.


Insider Trading

No 3 month open market individual insider trading information.


Recent Insider Transactions

SellUS$123,45607 May 19
Shelly Chadwick
EntityIndividual
Role
VP of Finance & Chief Accounting Officer
Shares2,400
Max PriceUS$51.44
SellUS$416,89207 May 19
Ronald Myers
EntityIndividual
Role
Executive Vice President of Human Resources
Shares8,168
Max PriceUS$51.07
BuyUS$205,25006 Nov 18
Frank Sullivan
EntityIndividual
Role
Member of the Board of Directors
Shares5,000
Max PriceUS$41.05

Ownership Breakdown


Management Team

  • Ronald Myers (60yo)

    Executive Vice President of Human Resources

    • Tenure: 1.8yrs
    • Compensation: $1.33m
  • Hansal Patel

    Vice President of Legal & Corporate Secretary

    • Tenure: 0.3yrs
  • Michael Connors

    Vice President of Global Marketing

    • Tenure: 3.4yrs
  • Jason Hershiser

    Manager of Investor Relations

  • Rich Kyle (53yo)

    President

    • Tenure: 5.3yrs
    • Compensation: $8.72m
  • Kari Groh

    Vice President of Communications & Public Relations

    • Tenure: 9.7yrs
  • Shelly Chadwick

    VP of Finance & Chief Accounting Officer

    • Tenure: 2.8yrs
  • Christopher Coughlin (58yo)

    Executive VP & Group President

    • Tenure: 5.6yrs
    • Compensation: $2.63m
  • Richard Boyer

    Vice President of Operations

  • Philip Fracassa (51yo)

    Executive VP & CFO

    • Tenure: 5.4yrs
    • Compensation: $2.65m

Board Members

  • John Luke (70yo)

    Independent Director

    • Tenure: 20.6yrs
    • Compensation: $228.19k
  • Frank Sullivan (58yo)

    Independent Director

    • Tenure: 15.8yrs
    • Compensation: $240.69k
  • Jacqueline Woods (71yo)

    Independent Director

    • Tenure: 19.6yrs
    • Compensation: $218.19k
  • James Palmer (69yo)

    Independent Director

    • Tenure: 4.0yrs
    • Compensation: $227.19k
  • Rich Kyle (53yo)

    President

    • Tenure: 6.6yrs
    • Compensation: $8.72m
  • Ajita Rajendra (67yo)

    Independent Director

    • Tenure: 5.0yrs
    • Compensation: $226.76k
  • Sanjay Koul (54yo)

    Chairman & MD of India

  • Tim Timken (51yo)

    Director

    • Tenure: 17.6yrs
    • Compensation: $203.19k
  • John Timken (67yo)

    Chairman

    • Tenure: 5.3yrs
    • Compensation: $303.19k
  • Maria Crowe (59yo)

    Independent Director

    • Tenure: 4.8yrs
    • Compensation: $219.48k

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$3.036b
  • Shares outstanding: 76.04m
  • Website: Click here

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 Analysis2019/08/16 23:42
End of Day Share Price2019/08/16 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.