DONALDSON CO INC (DCI)
US2576511099 - Common Stock
We assign a fundamental rating of 6 out of 10 to DCI. DCI was compared to 132 industry peers in the Machinery industry. DCI scores excellent points on both the profitability and health parts. This is a solid base for a good stock. While showing a medium growth rate, DCI is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
DCI had positive earnings in the past year.
In the past year DCI had a positive cash flow from operations.
DCI had positive earnings in each of the past 5 years.
DCI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 13.52%, DCI belongs to the top of the industry, outperforming 89.92% of the companies in the same industry.
Looking at the Return On Equity, with a value of 27.36%, DCI belongs to the top of the industry, outperforming 88.37% of the companies in the same industry.
The Return On Invested Capital of DCI (19.60%) is better than 92.25% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for DCI is significantly above the industry average of 10.72%.
The last Return On Invested Capital (19.60%) for DCI is above the 3 year average (17.07%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.52% | ||
| ROE | 27.36% | ||
| ROIC | 19.6% |
ROA(3y)12.57%
ROA(5y)12.32%
ROE(3y)27.26%
ROE(5y)27.58%
ROIC(3y)17.07%
ROIC(5y)16.62%
1.3 Margins
DCI's Profit Margin of 10.82% is fine compared to the rest of the industry. DCI outperforms 76.74% of its industry peers.
DCI's Profit Margin has improved in the last couple of years.
DCI has a better Operating Margin (14.34%) than 75.19% of its industry peers.
DCI's Operating Margin has been stable in the last couple of years.
DCI has a better Gross Margin (34.45%) than 65.12% of its industry peers.
DCI's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.34% | ||
| PM (TTM) | 10.82% | ||
| GM | 34.45% |
OM growth 3Y2.04%
OM growth 5Y0.3%
PM growth 3Y1.66%
PM growth 5Y9.66%
GM growth 3Y0.07%
GM growth 5Y-0.23%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), DCI is creating value.
DCI has less shares outstanding than it did 1 year ago.
DCI has less shares outstanding than it did 5 years ago.
DCI has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 6.93 indicates that DCI is not in any danger for bankruptcy at the moment.
DCI has a better Altman-Z score (6.93) than 84.50% of its industry peers.
The Debt to FCF ratio of DCI is 1.38, which is an excellent value as it means it would take DCI, only 1.38 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 1.38, DCI belongs to the best of the industry, outperforming 83.72% of the companies in the same industry.
DCI has a Debt/Equity ratio of 0.29. This is a healthy value indicating a solid balance between debt and equity.
DCI has a Debt to Equity ratio of 0.29. This is in the better half of the industry: DCI outperforms 64.34% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.29 | ||
| Debt/FCF | 1.38 | ||
| Altman-Z | 6.93 |
ROIC/WACC2.18
WACC8.99%
2.3 Liquidity
A Current Ratio of 1.47 indicates that DCI should not have too much problems paying its short term obligations.
DCI has a Current ratio of 1.47. This is in the lower half of the industry: DCI underperforms 75.19% of its industry peers.
DCI has a Quick Ratio of 1.47. This is a bad value and indicates that DCI is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.99, DCI is not doing good in the industry: 65.89% of the companies in the same industry are doing better.
DCI does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.47 | ||
| Quick Ratio | 0.99 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 4.73% over the past year.
The Earnings Per Share has been growing by 8.37% on average over the past years. This is quite good.
The Revenue has been growing slightly by 1.74% in the past year.
Measured over the past years, DCI shows a small growth in Revenue. The Revenue has been growing by 4.64% on average per year.
EPS 1Y (TTM)4.73%
EPS 3Y14.15%
EPS 5Y8.37%
EPS growth Q2Q8%
Revenue 1Y (TTM)1.74%
Revenue growth 3Y9.94%
Revenue growth 5Y4.64%
Revenue growth Q2Q5.84%
3.2 Future
The Earnings Per Share is expected to grow by 8.40% on average over the next years. This is quite good.
The Revenue is expected to grow by 4.68% on average over the next years.
EPS Next Y10.6%
EPS Next 2Y10.65%
EPS Next 3Y11.01%
EPS Next 5Y8.4%
Revenue Next Year3.85%
Revenue Next 2Y4.69%
Revenue Next 3Y5.01%
Revenue Next 5Y4.68%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 23.81 indicates a rather expensive valuation of DCI.
Compared to the rest of the industry, the Price/Earnings ratio of DCI is on the same level as its industry peers.
When comparing the Price/Earnings ratio of DCI to the average of the S&P500 Index (28.28), we can say DCI is valued inline with the index average.
The Price/Forward Earnings ratio is 20.17, which indicates a rather expensive current valuation of DCI.
Compared to the rest of the industry, the Price/Forward Earnings ratio of DCI is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of DCI to the average of the S&P500 Index (20.88), we can say DCI is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.81 | ||
| Fwd PE | 20.17 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as DCI.
Based on the Price/Free Cash Flow ratio, DCI is valued a bit cheaper than the industry average as 68.22% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.03 | ||
| EV/EBITDA | 15.55 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
DCI has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.25
PEG (5Y)2.84
EPS Next 2Y10.65%
EPS Next 3Y11.01%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.37%, DCI has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.73, DCI pays a bit more dividend than its industry peers.
With a Dividend Yield of 1.37, DCI pays less dividend than the S&P500 average, which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.37% |
5.2 History
The dividend of DCI has a limited annual growth rate of 5.16%.
DCI has been paying a dividend for at least 10 years, so it has a reliable track record.
DCI has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)5.16%
Div Incr Years19
Div Non Decr Years19
5.3 Sustainability
31.48% of the earnings are spent on dividend by DCI. This is a low number and sustainable payout ratio.
DCI's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP31.48%
EPS Next 2Y10.65%
EPS Next 3Y11.01%
DONALDSON CO INC
NYSE:DCI (5/3/2024, 7:04:00 PM)
After market: 73.82 0 (0%)73.82
+0.62 (+0.85%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap8.89B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.37% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.81 | ||
| Fwd PE | 20.17 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.25
PEG (5Y)2.84
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.52% | ||
| ROE | 27.36% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 14.34% | ||
| PM (TTM) | 10.82% | ||
| GM | 34.45% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.25
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.29 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.47 | ||
| Quick Ratio | 0.99 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)4.73%
EPS 3Y14.15%
EPS 5Y
EPS growth Q2Q
EPS Next Y10.6%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)1.74%
Revenue growth 3Y9.94%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y