Snap-On (NYSE: SNA) and Timken Company (The) (NYSE:TKR) are both mid-cap consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitabiliy, valuation, risk, earnings, institutional ownership and dividends.

Risk & Volatility

Snap-On has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500. Comparatively, Timken Company (The) has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Snap-On and Timken Company (The), as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Snap-On 0 1 5 0 2.83
Timken Company (The) 0 3 2 0 2.40

Snap-On presently has a consensus price target of $197.00, indicating a potential upside of 28.95%. Timken Company (The) has a consensus price target of $45.20, indicating a potential upside of 3.67%. Given Snap-On’s stronger consensus rating and higher probable upside, equities analysts plainly believe Snap-On is more favorable than Timken Company (The).

Dividends

Snap-On pays an annual dividend of $2.84 per share and has a dividend yield of 1.9%. Timken Company (The) pays an annual dividend of $1.08 per share and has a dividend yield of 2.5%. Snap-On pays out 29.3% of its earnings in the form of a dividend. Timken Company (The) pays out 51.7% 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. Snap-On has raised its dividend for 7 consecutive years and Timken Company (The) has raised its dividend for 3 consecutive years.

Profitability

This table compares Snap-On and Timken Company (The)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Snap-On 16.22% 20.90% 11.89%
Timken Company (The) 5.98% 12.73% 5.96%

Insider & Institutional Ownership

92.3% of Snap-On shares are owned by institutional investors. Comparatively, 76.9% of Timken Company (The) shares are owned by institutional investors. 3.7% of Snap-On shares are owned by insiders. Comparatively, 11.1% of Timken Company (The) shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Snap-On and Timken Company (The)’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Snap-On $3.83 billion 2.30 $971.00 million $9.68 15.78
Timken Company (The) $2.77 billion 1.23 $385.30 million $2.09 20.86

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

Summary

Snap-On beats Timken Company (The) on 13 of the 17 factors compared between the two stocks.

Snap-On Company Profile

Snap-on Incorporated is a manufacturer and marketer of tools, equipment, diagnostics, repair information and systems solutions. The Company’s segments include the Commercial & Industrial Group, the Snap-on Tools Group, the Repair Systems & Information Group, and Financial Services. The Commercial & Industrial Group consists of business operations serving a range of industrial and commercial customers, including customers in the aerospace, natural resources, government, power generation, transportation and technical education markets. The Snap-on Tools Group consists of business operations primarily serving vehicle service and repair technicians. The Repair Systems & Information Group consists of business operations serving other professional vehicle repair customers, primarily owners and managers of independent repair shops and original equipment manufacturer (OEM) dealership service and repair shops. Financial Services consists of the business operations of its finance subsidiaries.

Timken Company (The) Company Profile

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.

Receive News & Ratings for Snap-On Incorporated Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Snap-On Incorporated and related companies with MarketBeat.com's FREE daily email newsletter.