This industrial company is expected to grow by 12.9% this year. The shares have a current annual dividend yield of 2.13%, paid quarterly.
The Timken Company (TKR)
From 2 for 1 Stock Split Newsletter
I’ll be going back to the earliest memories of my interest in the stock market when I buy The Timken Company (TKR) for the 2 for 1 portfolio next week. My mother had inherited a few shares of Timken and every three months the mailman would bring her a dividend check. I thought that was pretty cool, almost magic, and I wanted to learn how I could do that.
The “R” in the TKR ticker symbol stands for “roller bearing”. In 1899 Mr. Henry Timken invented the tapered roller bearing and, within a few years, 80% of America’s autos and rail cars were rolling on Timken’s bearings. This is an example of the best in American industrial innovation and manufacturing capabilities. Although no longer a family owned business, John Timken, great-grandson of the founder, remains as chairman of the board.
There is no stock split in sight for TKR but almost all the other metrics considered important in the 2 for 1 stock evaluation algorithm are on the plus side of the line. A low PE (13.4) and a lower than average price-to-book ratio (2.3) are the first numbers to attract my attention. The solid balance sheet, a good dividend yield, and a 5-year 17% annual earnings growth curve also contribute to paint the picture of a very sound, well-run, industrial powerhouse. The Beta of 1.83 is the one number not to my liking, but you can’t have everything.
TKR’s stock price may be somewhat volatile but I’m counting on the company continuing to be a stable, reliable, and profitable provider of industrial products, as it has been over its long history. TKR can be viewed as another defensive position in the 2 for 1 portfolio at a time when uncertainty in the economy and frothiness in the markets is worrisome. As always, I would prefer to buy a stock split, but a solid old-timer like Timken will do for now.
Neil Macneale, 2 for 1 Stock Split Newsletter, www.2-for-1.com, 408-210-6881, November 15, 2019