Critical Analysis: Timken (NYSE:TKR) versus Spruce Power (NYSE:SPRU)

Spruce Power (NYSE:SPRU) and Timken (NYSE:TKR) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, earnings, valuation, profitability and analyst recommendations.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Spruce Power	$82.11 million	0.89	-$70.49 million	($1.38)	-2.90
Timken	$4.58 billion	1.49	$288.40 million	$4.11	23.73

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

Risk & Volatility

Spruce Power has a beta of 1.31, indicating that its stock price is 31% more volatile than the S&P 500. Comparatively, Timken has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Spruce Power and Timken, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Spruce Power	1	0	0	0	1.00
Timken	1	5	4	0	2.30

Timken has a consensus target price of $94.89, indicating a potential downside of 2.72%. Given Timken’s stronger consensus rating and higher probable upside, analysts plainly believe Timken is more favorable than Spruce Power.

Insider & Institutional Ownership

20.8% of Spruce Power shares are held by institutional investors. Comparatively, 89.1% of Timken shares are held by institutional investors. 12.7% of Spruce Power shares are held by insiders. Comparatively, 8.7% of Timken shares 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.

Profitability

This table compares Spruce Power and Timken’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Spruce Power	-23.23%	-18.82%	-2.86%
Timken	6.29%	11.52%	5.58%

Summary

Timken beats Spruce Power on 12 of the 14 factors compared between the two stocks.

About Spruce Power

Spruce Power Holding Corporation owns and operates distributed solar energy assets in the United States. The company provides subscription-based services for homeowners and businesses to own and maintain rooftop solar and battery storage. It offers its subscription-based services to approximately 75,000 customers. The company is headquartered in Denver, Colorado.

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.