Timken Company (The) (TKR) versus Newport Corp (NEWP) Critical Analysis

Timken Company (The) (NYSE: TKR) and Newport Corp (NASDAQ:NEWP) are both industrial products companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, risk, profitability and institutional ownership.

Analyst Recommendations

This is a summary of recent ratings and target prices for Timken Company (The) and Newport Corp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Timken Company (The) 0 3 2 0 2.40
Newport Corp 0 0 0 0 N/A

Timken Company (The) currently has a consensus target price of $45.20, suggesting a potential upside of 2.73%. Given Timken Company (The)’s higher possible upside, equities research analysts plainly believe Timken Company (The) is more favorable than Newport Corp.

Earnings and Valuation

This table compares Timken Company (The) and Newport Corp’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Timken Company (The) $2.77 billion 1.24 $385.30 million $2.09 21.05
Newport Corp N/A N/A N/A N/A N/A

Timken Company (The) has higher revenue and earnings than Newport Corp.

Dividends

Timken Company (The) pays an annual dividend of $1.08 per share and has a dividend yield of 2.5%. Newport Corp does not pay a dividend. Timken Company (The) pays out 51.7% of its earnings in the form of a dividend. Newport Corp has increased its dividend for 3 consecutive years.

Profitability

This table compares Timken Company (The) and Newport Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Timken Company (The) 5.98% 12.73% 5.96%
Newport Corp 6.37% 10.63% 6.60%

Insider and Institutional Ownership

79.6% of Timken Company (The) shares are owned by institutional investors. 11.1% of Timken Company (The) shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Timken Company (The) beats Newport Corp on 7 of the 11 factors compared between the two stocks.

About Timken Company (The)

The Timken Company engineers, manufactures and markets bearings, transmissions, gearboxes, belts, chain, couplings and related products and offers a spectrum of power system rebuild and repair services across the world. The Company operates through two segments: Mobile Industries and Process Industries. Its Mobile Industries segment offers a portfolio of bearings, seals, lubrication devices and systems, as well as power transmission components, engineered chain, augers, belts 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 powersports markets; on-highway vehicles, including passenger cars, light trucks and medium- and heavy-duty trucks; rail cars, and locomotives. Its Process Industries segment supplies industrial bearings and assemblies, power transmission components, and related products and services to OEMs and end users.

About Newport Corp

Newport Corporation is a supplier of technology products and systems. The Company offers its products and services to a range of industries, including scientific research, microelectronics, defense and security, life and health sciences, and industrial markets. The Company operates through three business segments: Photonics Group, which includes photonics instruments and systems, vibration isolation systems and subsystems, precision positioning systems and subsystems, optical components for research applications, optical hardware, and three-dimensional non-contact measurement sensors and equipment; Lasers Group, which offers a portfolio of laser technology products and services, including ultrafast lasers and amplifiers, fiber lasers, diode-pumped solid-state lasers, and high-energy pulsed lasers and tunable lasers, and Optics Group, which offers precision optics and lens assemblies, thin-film filters and coatings, replicated mirrors, and ruled and holographic diffraction gratings.

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