This Overlooked 127-Year-Old Bearings Maker Is Quietly Compounding
Wall Street’s newest quiet AI trade doesn’t involve a single chipmaker. Hightower Advisors’ Stephanie Link just added The Timken Company (TKR) to her portfolio, betting that the real winners of the robotics and automation boom won’t just be Nvidia and its peers, but the century-old industrial suppliers building the physical hardware underneath it. Timken, founded in 1899, makes the engineered bearings and precision motion components that keep robots, wind turbines, and factory equipment running — unglamorous machinery that’s suddenly in high demand.
The numbers back up the thesis. Second-quarter 2026 sales rose 7.5% to $1.26 billion, with adjusted earnings per share of $1.83, comfortably ahead of the $1.62 Wall Street expected. Adjusted EBITDA margin hit 19.6%, and management responded by raising full-year guidance — adjusted EPS is now seen at $6.05 to $6.35, up from $5.75 to $6.25, with revenue growth guidance lifted to 5.5%. Yet the stock still trades roughly 15% below its 52-week high of $146.37, near $124, even as fundamentals improved. That gap between a 33x trailing P/E and an 18.8x forward multiple is exactly the kind of valuation reset patient investors look for.
There’s also a dividend story most headlines are missing. Timken has raised its payout for 13 consecutive years and has made 416 consecutive quarterly dividend payments dating back to its 1922 NYSE listing — one of the longest uninterrupted dividend streaks in industrials. The current $1.44 annual dividend yields a modest 1.16%, but it’s backed by a genuine competitive moat: precision bearings require tight engineering tolerances and long qualification cycles, which makes switching costs high and customer relationships sticky for decades. Twelve analysts rate the stock a consensus Buy, with an average price target of $147.20 — and Citi recently raised its target to $160.
So what for long-term investors: the AI and automation buildout has beneficiaries far removed from the chip stocks getting all the attention. Timken is a reminder that century-old industrial compounders, with dividend discipline and durable moats, can quietly ride the same secular wave — often at a more reasonable valuation after a pullback than the names making daily headlines.
