Financial Review: Twin Disc (TWIN) and The Competition

Twin Disc (NASDAQ:TWIN) is one of 436 public companies in the “Machinery” industry, but how does it weigh in compared to its peers? We will compare Twin Disc to related companies based on the strength of its risk, analyst recommendations, institutional ownership, valuation, profitability, dividends and earnings.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Twin Disc	9.87%	8.24%	4.23%
Twin Disc Competitors	-1,039.02%	-14.89%	0.52%

Volatility & Risk

Twin Disc has a beta of 0.5, meaning that its stock price is 50% less volatile than the S&P 500. Comparatively, Twin Disc’s peers have a beta of 5.11, meaning that their average stock price is 411% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Twin Disc and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Twin Disc	0	1	2	0	2.67
Twin Disc Competitors	4211	14724	18253	808	2.41

Twin Disc currently has a consensus target price of $30.00, indicating a potential upside of 20.64%. As a group, “Machinery” companies have a potential upside of 29.19%. Given Twin Disc’s peers higher possible upside, analysts clearly believe Twin Disc has less favorable growth aspects than its peers.

Valuation & Earnings

This table compares Twin Disc and its peers gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Twin Disc	$381.27 million	$27.08 million	9.35
Twin Disc Competitors	$4.66 billion	$364.17 million	15.92

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

Insider & Institutional Ownership

65.2% of Twin Disc shares are held by institutional investors. Comparatively, 51.8% of shares of all “Machinery” companies are held by institutional investors. 21.1% of Twin Disc shares are held by insiders. Comparatively, 14.3% of shares of all “Machinery” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Twin Disc pays an annual dividend of $0.20 per share and has a dividend yield of 0.8%. Twin Disc pays out 7.5% of its earnings in the form of a dividend. As a group, “Machinery” companies pay a dividend yield of 2.8% and pay out 24.5% of their earnings in the form of a dividend.

Summary

Twin Disc beats its peers on 8 of the 15 factors compared.

About Twin Disc

Twin Disc, Inc. designs, manufactures and sells power transmission and propulsion systems for marine, industrial and specialty vehicle applications. The company’s products are used to transfer and control engine power in commercial and recreational boats, workboats, military vessels, construction equipment and other heavy-duty machinery. Its product portfolio includes marine transmissions, propulsion systems, surface drives, electronic controls, boat-management systems, power take-offs, torque converters and industrial transmissions.