Financial Analysis: THK (THKLY) & Its Rivals

THK (OTCMKTS:THKLY) is one of 434 publicly-traded companies in the “Machinery” industry, but how does it compare to its peers? We will compare THK to related businesses based on the strength of its institutional ownership, analyst recommendations, profitability, valuation, risk, dividends and earnings.

Dividends

THK pays an annual dividend of $0.37 per share and has a dividend yield of 1.7%. THK pays out 123.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Machinery” companies pay a dividend yield of 2.8% and pay out 27.4% of their earnings in the form of a dividend. THK lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Earnings & Valuation

This table compares THK and its peers revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
THK	$1.61 billion	-$468.27 million	71.43
THK Competitors	$4.67 billion	$369.35 million	-6.28

THK’s peers have higher revenue and earnings than THK. THK is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a summary of current recommendations for THK and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
THK	0	1	0	0	2.00
THK Competitors	4115	14547	17972	787	2.41

As a group, “Machinery” companies have a potential upside of 31.93%. Given THK’s peers stronger consensus rating and higher possible upside, analysts plainly believe THK has less favorable growth aspects than its peers.

Profitability

This table compares THK and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
THK	N/A	N/A	N/A
THK Competitors	-1,040.92%	-9.37%	0.94%

Institutional and Insider Ownership

52.2% of shares of all “Machinery” companies are held by institutional investors. 14.3% of shares of all “Machinery” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility and Risk

THK has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500. Comparatively, THK’s peers have a beta of 4.72, suggesting that their average stock price is 372% more volatile than the S&P 500.

Summary

THK peers beat THK on 12 of the 15 factors compared.

THK Company Profile

THK Co., Ltd. engages in the manufacture and sale of mechanical components worldwide. The company provides linear motion (LM) guides, ball screws, ball splines, LM guide actuators, cross roller rings/ double row angular contact ring, electric actuators, linear motor actuators, cam followers, roller followers, linear bushes, LM strokes, slide packs, slide rails, cross roller guides and tables, linear ball slides, LM and flat rollers, spline nuts, screw nuts, change nuts, precision linear packs, link balls, rod ends, spherical plain bearings, lubrication accessories, and seismic isolation products. Its products are used in various applications, including machine tools, general industrial machinery, precision instruments, semiconductor and LCD manufacturing equipment, industrial robots, electronic devices, and transport systems, as well as in construction, aerospace, medical and assistive, and other manufacturing industries. The company was incorporated in 1946 and is headquartered in Tokyo, Japan.