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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
The Timken Company (XNYS:TKR) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
TKR
Name:
THE TIMKEN COMPANY (XNYS:TKR)
Sector:
- 35500.00K
Industry:
Tools & Accessories
CEO:
Mr. Richard Kyle
Total Employees:
18,029
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -86.29% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF THE TIMKEN COMPANY(TKR) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND TOOLS & ACCESSORIES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
62.41
One Month Price Target:
$62.97
Six Month Price Target :
$65.74
Likely Price in One Year's Time:
Ticker:
$69.07
Likely Trading Range Today Under (Normal Volatility)
$62.14
Price Upper limit ($) :
$62.76
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$58.7
This week:
$54.11
This month :
$45.8
Other Primary facts
Market Cap:
4.70B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
73.45M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
18.37%
-20.03%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$79.64
$71.72
$45.18
$53.10
Medium risk (<10%) entry points
Buy Call
Sell Call
$69.14
Buy Put:
Sell Put:
$67.45
$55.66
$57.37
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
TKR
Sharpe Ratio:
1.85%
Comparison:
TKR, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 38.33% higher than the industry
& is -18.77% lower than the market/S&P 500 average
Average Returns/Yield of
TKR
Daily returns:
0.06%
Weekly returns:
0.32%
Monthly returns:
1.26%
Yearly returns:
10.57%
Comparison of returns:
Average annual returns/yield (last 3 years) is 43.13% above industry average
Classification:
TKR, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.01
Statistical test of Returns:
TKR has yielded a higher return than the market, the results are statistically significant
Volatility (measured by Standard Deviation)
Daily Volatility:
2.93%
Weekly Volatility:
6.55%
Monthly Volatility:
13.09%
Yearly Volatility:
45.36%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.65%
Volatility in last five trading days has been -77.67% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.95%
Weekly VaR:
-13.30%
Monthly VaR:
-26.61%
How Much Can the price of
TKR
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-23%
Worst case (decline):
-92.18%
This translates to price declining to:
$48.17
This translates to price declining to:
$4.88
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
TKR is a 87.81% riskier investment compared to the market/S&P 500 & is 60.90% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 10.85% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
TKR
Beta in relation to market/S&P 500--1.59
Expected beta in 1 year's time:
0.895
Expected beta in 3 year's time:
1.266
Unlevered (debt free) Beta:
0.976
Beta in relation to Nasdaq (XNAS):
0.927
Beta in relation to all global stocks::
1.016
Beta Comparison & Analysis
Beta of competitors/peers::
1.315
Beta is 20.82% higher than peers
Average Industry Beta:
1.226
Beta is 29.59% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
12.29%
Sustainable growth rate is 0.03% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.011
Alpha is -212.99% below industry average alpha yield
Alpha is 70% compared to market & is healthy
Analysis of Cost of Capital of
TKR
Equity cost of capital:
0.140
Equity cost of capital is 21.52% above industry mean WACC
Unlevered (without debt) cost of capital:
8.62%
Before-tax cost of debt:
3.08%
After-tax cost of debt:
2.43%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.43%
WACC is 7.32% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$57.62
Revenue growth rate per share of (3Y):
1.95
Annual revenue growth rate is 51.57% above the industry average
EPS:
$4.89
Expected Annual growth rate of EPS (3Y):
0.07%
Expected future EPS growth rate is -103.09% lower than the Tools & Accessories industry
Free cash flow (FCF) per share:
$2.67
Balance sheet equity growth per share: 10.10%
Equity growth rate per share is -15.51% lower than the industry
Debt per share
$24.83
EBITDA per share
$9.62
Valuation Analysis Today of
TKR
P/E Ratio:
12.62
P/E Ratio of Competitors/Peers:
22.99
P/E ratio is -45.11% lower than main peers & is -63.54% lower than the industry
Stock price/value with industry average P/E ratio: $169.27
TKR is -63.13% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $20.01
Present value of the expected future dividends only: $9.41
P/S (Price to Sales ratio):
1.08
Price to sales ratio is -62.74% below the industry mean
P/B (Price to book value ratio):
1.95
Price to free cash flow: 23.39
-
Net income growth rate (3Y):
24.75%
Net income growth rate is 88.95% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 6.28%
Dividend yeild: 1.94%
Previous Dividend: $0.31
Previous adjusted dividend: $0.31
Previous Dividend: $1.21
Expected next dividend best case: $0.32
Expected next dividend worst case: $0.30
Average dividend payment (long-term): $0.29
Average dividend increase/decrease (growth rate) % per period: 1.04%
Expected next dividend payment date: 31/08/2022
Expected next dividend record date: 15/08/2022
Expected next dividend declaration date: 08/04/2022
Previous dividend payment date: 06/02/2022
Previous dividend record date: 16/05/2022
Previous dividend declaration date: 05/06/2022
Dividend History:
2022-05-13--$0.31
2021-11-19--$0.30
2021-05-20--$0.30
2022-02-18--$0.30
2021-08-19--$0.30
2021-02-19--$0.29
Dividend growth rate is -56.70% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
80.30%
Net debt to equity ratio:
64.55%
Debt to assets ratio:
33.41%
Net debt to assets ratio:
26.86%
Debt-to-asset ratio is -41.98% below industry average
Ability to repay debt:
Interest coverage ratio:
12.14
Interest coverage ratio is 1.18% more than industry average
Looking forward:
Debt growth rate:
834.31%
Annual debt growth is 399% higher than industry average debt growth rate
Debt repayment rate in last quarter: 13.42%
Analysis of Key Statistics
Correlation of price movement with the market:
0.697
Statistical significance of correlation:
TKR has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.678
Stock price is 2.78% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.678
Correlation of price movement with Nasdaq (^IXIC):
-0.009
Covariance of price movement with the market:
-0.015
Kurtosis
8.51
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.123
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
TKR
Gross Profit Margin Ratio:
107%
Operating Profit Margin Ratio:
12.63%
Operating profit margin is 86.46% higher than the industry
Net Profit Margin Ratio:
107%
Effective Tax Rate:
21.80%
Effective tax rate is 26.27% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
16.47%
Return on equity (ROE) is 15.00% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
6.85%
Return on assets (ROA) is 21.88% higher than the industry
Financial Leverage:
1.5x
Current Ratio:
2.94
Current ratio is 39.83% above industry average
Cash Conversion Cycle (days):
34.4
Cash conversion cycle is -69.71% below industry average
The remaining useful life of property plant & equipment is: 9.0 years
Stock based compensation to net income ratio:
1.90%
In-depth Efficiency Analysis
Revenue generated per employee:
234.7K
Each employee generates -20% less revenue than industry average revenue per employee
EBITDA generated per employee:
39.2K
Each employee generates -12% less EBITDA than industry average revenue per employee
Profit generated per employee:
20.7K
Each employee generates -15% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 2.0K
Each employee generates -697% less free cash flow than industry average revenue per employee
Assets/Capital per employee
161.4K
Each employee generates -697% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
TKR
SIMPSON MANUFACTURING CO., INC. (XNYS:SSD)
MSA Safety Incorporated (XNYS:MSA)
CURTISS-WRIGHT CORPORATION (XNYS:CW)
UNUM GROUP (XNYS:UNMA)
API GROUP CORPORATION (XNYS:APG)
TRINET GROUP, INC. (XNYS:TNET)
AIR LEASE CORPORATION (XNYS:AL)
ARMSTRONG WORLD INDUSTRIES, INC. (XNYS:AWI)
CLEAN HARBORS, INC. (XNYS:CLH)
Current Analyst Ratings
Strong buy�0%
Buy�13%
Hold�17%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
4.23B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
3.10B
1.13B
-
-
590.10M
-
-
590.10M
2.40M
58.20M
166.20M
706.40M
534.70M
374.00M
495.40M
108.00M
374.00M
Statement of Cash Flow
Date:
Period:
41.40M
Differed Income Tax :
1.80M
Stock Based Compensation :
7.10M
Change in Working Capital :
- 169800.00K
Accounts Receivables:
- 118200.00K
Other Working Capital:
8.00M
Other Non-Cash Items:
- 3600.00K
Net Cash Provided by Operating Activities:
- 1200.00K
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
- 800.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
424.50M
-
424.50M
832.40M
1.11B
178.80M
2.55B
1.16B
1.01B
648.60M
-
65.20M
29.40M
2.91B
-
5.46B
416.10M
66.70M
51.50M
-
383.40M
866.20M
1.82B
291.70M
2.24B
-
3.10B
40.70M
1.71B
- 42500.0K
561.80M
March 31, 2022 at 6:00:00 AM
3.69B
2.27B
5.37B
-
1.89B
1.5B
-
- 34200.00K
- 35000.00K
- 282700.00K
-
- 100000.00K
- 23500.00K
610.90M
204.70M
- 1200.00K
167.30M
425.20M
257.90M
- 1200.00K
- 34300.00K
- 35500.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
TKR
2023
2024
2025
2026
2027
$86.74
$96.00
$106.25
$117.59
$130.14