Critical Analysis: Timkensteel (TMST) versus The Competition

Timkensteel (NYSE: TMST) is one of 22 publicly-traded companies in the “Blast furnaces & steel mills” industry, but how does it weigh in compared to its rivals? We will compare Timkensteel to similar businesses based on the strength of its risk, profitability, earnings, dividends, institutional ownership, valuation and analyst recommendations.

Institutional & Insider Ownership

75.0% of Timkensteel shares are held by institutional investors. Comparatively, 54.6% of shares of all “Blast furnaces & steel mills” companies are held by institutional investors. 8.2% of Timkensteel shares are held by insiders. Comparatively, 9.4% of shares of all “Blast furnaces & steel mills” companies are held 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.



Profitability

This table compares Timkensteel and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Timkensteel -3.33% -7.56% -3.86%
Timkensteel Competitors 4.25% 10.75% 3.42%

Volatility and Risk

Timkensteel has a beta of 2.04, suggesting that its share price is 104% more volatile than the S&P 500. Comparatively, Timkensteel’s rivals have a beta of 1.38, suggesting that their average share price is 38% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for Timkensteel and its rivals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Timkensteel 0 2 2 0 2.50
Timkensteel Competitors 306 903 1077 53 2.37

Timkensteel currently has a consensus target price of $19.25, indicating a potential upside of 22.38%. As a group, “Blast furnaces & steel mills” companies have a potential upside of 12.82%. Given Timkensteel’s stronger consensus rating and higher possible upside, equities analysts clearly believe Timkensteel is more favorable than its rivals.

Earnings and Valuation

This table compares Timkensteel and its rivals top-line revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Timkensteel $1.33 billion -$43.80 million -15.73
Timkensteel Competitors $12.33 billion $652.37 million 16.12

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

Summary

Timkensteel rivals beat Timkensteel on 8 of the 13 factors compared.

About Timkensteel

TimkenSteel Corporation manufactures alloy steel, as well as carbon and micro-alloy steel. The Company’s portfolio includes special bar quality (SBQ) bars, seamless mechanical tubing and precision steel components. In addition, the Company supplies machining and thermal treatment services, as well as manage raw material recycling programs, which are used as a feeder system for its melt operations. The Company’s products include SBQ Steel and Seamless Mechanical Steel Tubing, and Value-added Precision Products and Services. Its focus is on alloy steel. The Company manufactures carbon, micro-alloy and alloy steel, sold as ingots, bars and tubes. In addition to its customized steels, the Company also manufactures custom-make precision components. Its products and services are used in a range of demanding applications in the market sectors, such as oil and gas, industrial equipment, mining and power generation.

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