Head-To-Head Survey: Century Aluminum (CENX) & The Timken (TKR)

Century Aluminum (NASDAQ: CENX) and The Timken (NYSE:TKR) are both industrial products companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, profitability, dividends and institutional ownership.

Institutional and Insider Ownership

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65.2% of Century Aluminum shares are held by institutional investors. Comparatively, 80.1% of The Timken shares are held by institutional investors. 0.6% of Century Aluminum shares are held by company insiders. Comparatively, 11.2% of The Timken shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility and Risk

Century Aluminum has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500. Comparatively, The Timken has a beta of 1.47, indicating that its share price is 47% more volatile than the S&P 500.

Dividends

The Timken pays an annual dividend of $1.08 per share and has a dividend yield of 2.3%. Century Aluminum does not pay a dividend. The Timken pays out 41.1% of its earnings in the form of a dividend. The Timken has increased its dividend for 4 consecutive years.

Profitability

This table compares Century Aluminum and The Timken’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Century Aluminum 3.02% 4.52% 2.26%
The Timken 6.77% 14.55% 6.47%

Analyst Recommendations

This is a breakdown of recent recommendations for Century Aluminum and The Timken, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Century Aluminum 0 2 3 0 2.60
The Timken 0 1 3 0 2.75

Century Aluminum currently has a consensus price target of $21.88, suggesting a potential upside of 19.99%. The Timken has a consensus price target of $51.00, suggesting a potential upside of 9.32%. Given Century Aluminum’s higher possible upside, equities analysts clearly believe Century Aluminum is more favorable than The Timken.

Earnings and Valuation

This table compares Century Aluminum and The Timken’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Century Aluminum $1.59 billion 1.00 $48.58 million $0.36 50.64
The Timken $3.00 billion 1.21 $203.40 million $2.63 17.74

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

Summary

The Timken beats Century Aluminum on 13 of the 16 factors compared between the two stocks.

About Century Aluminum

Century Aluminum Company, together with its subsidiaries, produces standard-grade and value-added primary aluminum in the United States and Iceland. The company was founded in 1995 and is headquartered in Chicago, Illinois.

About The Timken

The Timken Company engineers, manufactures, and markets bearings, transmissions, gearboxes, belts, chains, lubrication systems, couplings, industrial clutches and brakes, and related products worldwide. It operates through two segments, Mobile Industries and Process Industries. The Mobile Industries segment offers a portfolio of bearings, seals, lubrication devices, and systems, as well as power transmission components, engineered chains, augers, belts, couplings, clutches and brakes, 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 power sports markets; and on-highway vehicles, including passenger cars, light trucks, and medium- and heavy-duty trucks, as well as rail cars and locomotives. It also provides power transmission systems and flight-critical components for civil and military aircraft, which comprise bearings, helicopter transmission systems, rotor-head assemblies, turbine engine components, gears, and housings. This segment sells it parts through a network of authorized automotive and heavy-truck distributors to individual end users, equipment owners, operators, and maintenance shops. The Process Industries segment supplies industrial bearings and assemblies; power transmission components, including gears and gearboxes; and couplings, seals, lubricants, chains, belts, and related products and services to OEMs and end-users in various industries. It also supports aftermarket sales and service needs through its network of authorized industrial distributors; and offers repair and service for bearings and gearboxes, as well as electric motor rewind, repair, and services to end users. The Timken Company was founded in 1899 and is headquartered in North Canton, Ohio.

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