Timken (NYSE:TKR) vs. Spectris (OTCMKTS:SEPJY) Financial Analysis

Timken (NYSE:TKR) and Spectris (OTCMKTS:SEPJY) are both mid-cap computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, institutional ownership, valuation, risk, analyst recommendations, earnings and profitability.

Volatility & Risk

Timken has a beta of 1.2, indicating that its share price is 20% more volatile than the S&P 500. Comparatively, Spectris has a beta of 0.3, indicating that its share price is 70% less volatile than the S&P 500.

Profitability

This table compares Timken and Spectris’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Timken	6.60%	11.84%	5.79%
Spectris	N/A	N/A	N/A

Insider & Institutional Ownership

89.1% of Timken shares are held by institutional investors. 8.1% of Timken shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings for Timken and Spectris, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Timken	0	3	6	0	2.67
Spectris	0	1	0	0	2.00

Timken presently has a consensus price target of $150.00, indicating a potential upside of 6.16%. Given Timken’s stronger consensus rating and higher probable upside, analysts plainly believe Timken is more favorable than Spectris.

Valuation and Earnings

This table compares Timken and Spectris”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Timken	$4.58 billion	2.14	$288.40 million	$4.40	32.11
Spectris	$1.66 billion	3.05	$298.52 million	N/A	N/A

Spectris has lower revenue, but higher earnings than Timken.

Dividends

Timken pays an annual dividend of $1.44 per share and has a dividend yield of 1.0%. Spectris pays an annual dividend of $0.29 per share and has a dividend yield of 1.1%. Timken pays out 32.7% of its earnings in the form of a dividend. Timken has raised its dividend for 12 consecutive years.

Summary

Timken beats Spectris on 11 of the 15 factors compared between the two stocks.

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.

About Spectris

Spectris plc provides precision measurement solutions worldwide. It operates through Spectris Scientific, Spectris Dynamics, and Other segments. The Spectris Scientific segment provides advanced sensors and instruments used to measure, analyze, and characterize materials; and monitor ultra-clean manufacturing environments. Spectris Dynamics segment offers differentiated sensing, data acquisition, analysis modelling, and simulation solutions for product development and enhance product performance. The Other segment operates high-value precision in-line sensing and monitoring businesses. It serves life sciences/pharmaceuticals, technology-led industrials, automotive, electronics and semiconductor, academic research, and other markets, as well as metals, minerals, and mining. The company was formerly known as Fairey Group plc and changed its name to Spectris plc in May 2001. Spectris plc was incorporated in 1986 and is based in London, the United Kingdom.