DONALDSON CO INC (DCI) Stock Fundamental Analysis
NYSE:DCI - New York Stock Exchange, Inc. - US2576511099 - Common Stock - Currency: USD
Overall DCI gets a fundamental rating of 7 out of 10. We evaluated DCI against 127 industry peers in the Machinery industry. DCI gets an excellent profitability rating and is at the same time showing great financial health properties. DCI is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year DCI was profitable.
DCI had a positive operating cash flow in the past year.
In the past 5 years DCI has always been profitable.
Each year in the past 5 years DCI had a positive operating cash flow.
1.2 Ratios
DCI's Return On Assets of 12.09% is amongst the best of the industry. DCI outperforms 87.40% of its industry peers.
Looking at the Return On Equity, with a value of 24.75%, DCI belongs to the top of the industry, outperforming 89.76% of the companies in the same industry.
With an excellent Return On Invested Capital value of 18.57%, DCI belongs to the best of the industry, outperforming 92.91% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for DCI is significantly above the industry average of 10.88%.
The last Return On Invested Capital (18.57%) for DCI is above the 3 year average (18.29%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.09% | ||
| ROE | 24.75% | ||
| ROIC | 18.57% |
ROA(3y)13.32%
ROA(5y)12.67%
ROE(3y)28.11%
ROE(5y)27.12%
ROIC(3y)18.29%
ROIC(5y)17.08%
1.3 Margins
With a decent Profit Margin value of 9.94%, DCI is doing good in the industry, outperforming 68.50% of the companies in the same industry.
In the last couple of years the Profit Margin of DCI has grown nicely.
DCI has a better Operating Margin (15.36%) than 72.44% of its industry peers.
In the last couple of years the Operating Margin of DCI has grown nicely.
Looking at the Gross Margin, with a value of 35.39%, DCI is in the better half of the industry, outperforming 62.99% of the companies in the same industry.
DCI's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.36% | ||
| PM (TTM) | 9.94% | ||
| GM | 35.39% |
OM growth 3Y3.74%
OM growth 5Y2.29%
PM growth 3Y4.72%
PM growth 5Y4.21%
GM growth 3Y1.33%
GM growth 5Y1.35%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), DCI is creating value.
The number of shares outstanding for DCI has been reduced compared to 1 year ago.
DCI has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, DCI has an improved debt to assets ratio.
2.2 Solvency
DCI has an Altman-Z score of 6.60. This indicates that DCI is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 6.60, DCI belongs to the top of the industry, outperforming 85.04% of the companies in the same industry.
DCI has a debt to FCF ratio of 2.42. This is a good value and a sign of high solvency as DCI would need 2.42 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 2.42, DCI is doing good in the industry, outperforming 70.08% of the companies in the same industry.
A Debt/Equity ratio of 0.49 indicates that DCI is not too dependend on debt financing.
DCI has a Debt to Equity ratio of 0.49. This is comparable to the rest of the industry: DCI outperforms 44.09% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 2.42 | ||
| Altman-Z | 6.6 |
ROIC/WACC1.92
WACC9.69%
2.3 Liquidity
DCI has a Current Ratio of 1.94. This is a normal value and indicates that DCI is financially healthy and should not expect problems in meeting its short term obligations.
DCI's Current ratio of 1.94 is in line compared to the rest of the industry. DCI outperforms 46.46% of its industry peers.
A Quick Ratio of 1.24 indicates that DCI should not have too much problems paying its short term obligations.
The Quick ratio of DCI (1.24) is comparable to the rest of the industry.
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 | 1.94 | ||
| Quick Ratio | 1.24 |
3. Growth
3.1 Past
DCI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.12%, which is quite good.
Measured over the past years, DCI shows a quite strong growth in Earnings Per Share. The EPS has been growing by 9.03% on average per year.
The Revenue has been growing slightly by 3.26% in the past year.
The Revenue has been growing slightly by 4.74% on average over the past years.
EPS 1Y (TTM)10.12%
EPS 3Y13.81%
EPS 5Y9.03%
EPS Q2Q%7.61%
Revenue 1Y (TTM)3.26%
Revenue growth 3Y7.91%
Revenue growth 5Y4.74%
Sales Q2Q%1.31%
3.2 Future
The Earnings Per Share is expected to grow by 6.87% on average over the next years.
DCI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.06% yearly.
EPS Next Y7.98%
EPS Next 2Y6.79%
EPS Next 3Y7.31%
EPS Next 5Y6.87%
Revenue Next Year1.9%
Revenue Next 2Y2.65%
Revenue Next 3Y3.53%
Revenue Next 5Y4.06%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less 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
The Price/Earnings ratio is 20.04, which indicates a rather expensive current valuation of DCI.
Compared to the rest of the industry, the Price/Earnings ratio of DCI indicates a somewhat cheap valuation: DCI is cheaper than 66.14% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of DCI to the average of the S&P500 Index (28.04), we can say DCI is valued slightly cheaper.
The Price/Forward Earnings ratio is 18.44, which indicates a rather expensive current valuation of DCI.
Compared to the rest of the industry, the Price/Forward Earnings ratio of DCI indicates a somewhat cheap valuation: DCI is cheaper than 60.63% of the companies listed in the same industry.
DCI is valuated cheaply when we compare the Price/Forward Earnings ratio to 37.64, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.04 | ||
| Fwd PE | 18.44 |
4.2 Price Multiples
DCI's Enterprise Value to EBITDA ratio is in line with the industry average.
DCI's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.07 | ||
| EV/EBITDA | 13.4 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates DCI does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of DCI may justify a higher PE ratio.
PEG (NY)2.51
PEG (5Y)2.22
EPS Next 2Y6.79%
EPS Next 3Y7.31%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.67%, DCI has a reasonable but not impressive dividend return.
DCI's Dividend Yield is a higher than the industry average which is at 1.86.
DCI's Dividend Yield is slightly below the S&P500 average, which is at 2.31.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.67% |
5.2 History
The dividend of DCI has a limited annual growth rate of 5.51%.
DCI has been paying a dividend for at least 10 years, so it has a reliable track record.
DCI has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)5.51%
Div Incr Years29
Div Non Decr Years34
5.3 Sustainability
DCI pays out 35.71% of its income as dividend. This is a sustainable payout ratio.
The dividend of DCI is growing, but earnings are growing more, so the dividend growth is sustainable.
DP35.71%
EPS Next 2Y6.79%
EPS Next 3Y7.31%
71.93
+0.66 (+0.93%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners91.04%
Inst Owner Change10.6%
Ins Owners0.49%
Ins Owner Change0.25%
Market Cap8.38B
Analysts52.86
Price Target74.07 (2.98%)
Short Float %2.13%
Short Ratio4.66
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.67% |
Yearly Dividend1.02
Dividend Growth(5Y)5.51%
DP35.71%
Div Incr Years29
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.23%
Min EPS beat(2)-3.03%
Max EPS beat(2)3.49%
EPS beat(4)3
Avg EPS beat(4)1.42%
Min EPS beat(4)-3.03%
Max EPS beat(4)5.16%
EPS beat(8)6
Avg EPS beat(8)3.26%
EPS beat(12)8
Avg EPS beat(12)2.11%
EPS beat(16)9
Avg EPS beat(16)1.09%
Revenue beat(2)0
Avg Revenue beat(2)-2.73%
Min Revenue beat(2)-5.17%
Max Revenue beat(2)-0.28%
Revenue beat(4)1
Avg Revenue beat(4)-1.74%
Min Revenue beat(4)-5.17%
Max Revenue beat(4)0.25%
Revenue beat(8)2
Avg Revenue beat(8)-1.51%
Revenue beat(12)4
Avg Revenue beat(12)-0.98%
Revenue beat(16)7
Avg Revenue beat(16)-0.34%
PT rev (1m)-0.18%
PT rev (3m)2.86%
EPS NQ rev (1m)0.42%
EPS NQ rev (3m)0.58%
EPS NY rev (1m)0%
EPS NY rev (3m)1.35%
Revenue NQ rev (1m)0.23%
Revenue NQ rev (3m)0.27%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.04 | ||
| Fwd PE | 18.44 | ||
| P/S | 2.3 | ||
| P/FCF | 28.07 | ||
| P/OCF | 22.23 | ||
| P/B | 5.72 | ||
| P/tB | 9.6 | ||
| EV/EBITDA | 13.4 |
EPS(TTM)3.59
EY4.99%
EPS(NY)3.9
Fwd EY5.42%
FCF(TTM)2.56
FCFY3.56%
OCF(TTM)3.24
OCFY4.5%
SpS31.29
BVpS12.57
TBVpS7.49
PEG (NY)2.51
PEG (5Y)2.22
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.09% | ||
| ROE | 24.75% | ||
| ROCE | 25.04% | ||
| ROIC | 18.57% | ||
| ROICexc | 20.12% | ||
| ROICexgc | 27.8% | ||
| OM | 15.36% | ||
| PM (TTM) | 9.94% | ||
| GM | 35.39% | ||
| FCFM | 8.19% |
ROA(3y)13.32%
ROA(5y)12.67%
ROE(3y)28.11%
ROE(5y)27.12%
ROIC(3y)18.29%
ROIC(5y)17.08%
ROICexc(3y)20.31%
ROICexc(5y)19.16%
ROICexgc(3y)29.87%
ROICexgc(5y)27.08%
ROCE(3y)24.03%
ROCE(5y)22.48%
ROICexcg growth 3Y10.71%
ROICexcg growth 5Y4.17%
ROICexc growth 3Y5.64%
ROICexc growth 5Y1.68%
OM growth 3Y3.74%
OM growth 5Y2.29%
PM growth 3Y4.72%
PM growth 5Y4.21%
GM growth 3Y1.33%
GM growth 5Y1.35%
F-Score6
Asset Turnover1.22
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 2.42 | ||
| Debt/EBITDA | 1.09 | ||
| Cap/Depr | 78.4% | ||
| Cap/Sales | 2.15% | ||
| Interest Coverage | 27.59 | ||
| Cash Conversion | 57.12% | ||
| Profit Quality | 82.4% | ||
| Current Ratio | 1.94 | ||
| Quick Ratio | 1.24 | ||
| Altman-Z | 6.6 |
F-Score6
WACC9.69%
ROIC/WACC1.92
Cap/Depr(3y)102.18%
Cap/Depr(5y)102.09%
Cap/Sales(3y)2.81%
Cap/Sales(5y)3.06%
Profit Quality(3y)89.09%
Profit Quality(5y)97.8%
High Growth Momentum
Growth
EPS 1Y (TTM)10.12%
EPS 3Y13.81%
EPS 5Y9.03%
EPS Q2Q%7.61%
EPS Next Y7.98%
EPS Next 2Y6.79%
EPS Next 3Y7.31%
EPS Next 5Y6.87%
Revenue 1Y (TTM)3.26%
Revenue growth 3Y7.91%
Revenue growth 5Y4.74%
Sales Q2Q%1.31%
Revenue Next Year1.9%
Revenue Next 2Y2.65%
Revenue Next 3Y3.53%
Revenue Next 5Y4.06%
EBIT growth 1Y8%
EBIT growth 3Y11.95%
EBIT growth 5Y7.13%
EBIT Next Year26.06%
EBIT Next 3Y9.82%
EBIT Next 5Y9.16%
FCF growth 1Y-12.46%
FCF growth 3Y5.87%
FCF growth 5Y15.84%
OCF growth 1Y-18.5%
OCF growth 3Y7.01%
OCF growth 5Y7.33%