Analyzing TD SYNNEX (NYSE:SNX) & Timken (NYSE:TKR)

TD SYNNEX (NYSE:SNX) and Timken (NYSE:TKR) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, profitability, risk, earnings, analyst recommendations and valuation.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for TD SYNNEX and Timken, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TD SYNNEX	0	2	9	0	2.82
Timken	0	3	6	0	2.67

TD SYNNEX presently has a consensus price target of $233.10, suggesting a potential downside of 18.09%. Timken has a consensus price target of $141.63, suggesting a potential downside of 0.06%. Given Timken’s higher possible upside, analysts plainly believe Timken is more favorable than TD SYNNEX.

Insider and Institutional Ownership

84.0% of TD SYNNEX shares are held by institutional investors. Comparatively, 89.1% of Timken shares are held by institutional investors. 0.7% of TD SYNNEX shares are held by company insiders. Comparatively, 8.1% of Timken shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares TD SYNNEX and Timken’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TD SYNNEX	1.52%	14.03%	3.63%
Timken	6.60%	11.84%	5.79%

Volatility & Risk

TD SYNNEX has a beta of 1.43, meaning that its share price is 43% more volatile than the S&P 500. Comparatively, Timken has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500.

Dividends

TD SYNNEX pays an annual dividend of $1.92 per share and has a dividend yield of 0.7%. Timken pays an annual dividend of $1.44 per share and has a dividend yield of 1.0%. TD SYNNEX pays out 16.0% of its earnings in the form of a dividend. Timken pays out 32.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. TD SYNNEX has raised its dividend for 5 consecutive years and Timken has raised its dividend for 12 consecutive years. Timken is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares TD SYNNEX and Timken”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TD SYNNEX	$62.51 billion	0.37	$827.66 million	$12.03	23.66
Timken	$4.58 billion	2.15	$288.40 million	$4.40	32.21

TD SYNNEX has higher revenue and earnings than Timken. TD SYNNEX is trading at a lower price-to-earnings ratio than Timken, indicating that it is currently the more affordable of the two stocks.

Summary

Timken beats TD SYNNEX on 9 of the 17 factors compared between the two stocks.

About TD SYNNEX

TD SYNNEX Corporation operates as a distributor and solutions aggregator for the information technology (IT) ecosystem. The company offers personal computing devices and peripherals, mobile phones and accessories, printers, supplies, and endpoint technology software; and data center technologies, such as hybrid cloud, security, storage, networking, servers, technology software, and converged and hyper-converged infrastructure, as well as computing components. It also provides systems design and rack integration, build-to-order, and configure-to-order assembly; and thermal testing, power-draw testing, burn-in, and quality and logistics support. In addition, the company offers outsourced fulfillment, virtual distribution, and direct ship to end-users; shipping documents generation, multi-level serial number tracking, and configured products and online order and shipment tracking, as well as turn-key logistics solutions. Further, it provides public cloud solutions in productivity and collaboration, IaaS, or Infrastructure as a Service, PaaS, or Platform as a Service, SaaS, or Software as a Service, security, mobility, IoT, and other hybrid solutions. Additionally, the company offers online services; provides net terms, third party leasing, floor plan financing, and letters-of-credit backed financing and arrangement; and leases products and provides device-as-a-service, as well as offers direct mail, external media advertising, reseller product training, targeted telemarketing campaigns, national and regional trade shows, trade groups, database analysis, print on demand services, and web-based marketing. It serves value-added resellers, corporate resellers, government resellers, system integrators, direct marketers, retailers, and managed service providers. The company was formerly known as SYNNEX Corporation and changed its name to TD SYNNEX Corporation in September 2021. TD SYNNEX Corporation was founded in 1974 and is headquartered in Fremont, California.

About Timken

The Timken Company designs, manufactures, and sells engineered bearings and industrial motion products, and related services in the United States and internationally. The company's Engineered Bearings segment provides various bearing products, including tapered, spherical, and cylindrical roller bearings; plain bearings, metal-polymer bearings, and rod end bearings; radial, angular, and precision ball bearings; thrust and specialty ball bearings; journal bearings; and housed or mounted bearings. This segment serves wind energy, agriculture, construction, food and beverage, metals and mining, automotive and truck, aerospace, rail, and other industries under the Timken, GGB, and Fafnir brands. Its Industrial Motion segment offers a portfolio of engineered products comprising industrial drives, automatic lubrication systems, linear motion products and systems, chains, belts, seals, couplings, filtration systems, and industrial clutches and brakes. It also provides industrial drivetrain and bearing repairing services. This segment serves a range of industries, such as solar energy, automation, construction, agriculture and turf, passenger rail, marine, aerospace, packaging and logistics, medical, and others under the Philadelphia Gear, Cone Drive, Rollon, Nadella, Groeneveld, BEKA, Diamond, Drives, Timken Belts, Spinea, Des-Case, Lagersmit, Lovejoy, and PT Tech brands. The Timken Company was founded in 1899 and is headquartered in North Canton, Ohio.