DONALDSON CO INC (DCI) Stock Fundamental Analysis
NYSE:DCI - New York Stock Exchange, Inc. - US2576511099 - Common Stock - Currency: USD
DCI gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 128 industry peers in the Machinery industry. Both the health and profitability get an excellent rating, making DCI a very profitable company, without any liquidiy or solvency issues. While showing a medium growth rate, DCI is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year DCI was profitable.
DCI had a positive operating cash flow in the past year.
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
With an excellent Return On Assets value of 14.12%, DCI belongs to the best of the industry, outperforming 93.75% of the companies in the same industry.
The Return On Equity of DCI (27.07%) is better than 92.97% of its industry peers.
The Return On Invested Capital of DCI (19.01%) is better than 93.75% of its industry peers.
The Average Return On Invested Capital over the past 3 years for DCI is significantly above the industry average of 10.31%.
The last Return On Invested Capital (19.01%) for DCI is above the 3 year average (18.29%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.12% | ||
| ROE | 27.07% | ||
| ROIC | 19.01% |
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
Looking at the Profit Margin, with a value of 11.51%, DCI is in the better half of the industry, outperforming 79.69% of the companies in the same industry.
DCI's Profit Margin has improved in the last couple of years.
DCI has a better Operating Margin (15.18%) than 72.66% of its industry peers.
DCI's Operating Margin has improved in the last couple of years.
DCI's Gross Margin of 35.67% is fine compared to the rest of the industry. DCI outperforms 64.84% of its industry peers.
In the last couple of years the Gross Margin of DCI has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.18% | ||
| PM (TTM) | 11.51% | ||
| GM | 35.67% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so DCI is creating value.
Compared to 1 year ago, DCI has less shares outstanding
Compared to 5 years ago, DCI has less shares outstanding
Compared to 1 year ago, DCI has an improved debt to assets ratio.
2.2 Solvency
DCI has an Altman-Z score of 6.86. This indicates that DCI is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 6.86, DCI belongs to the best of the industry, outperforming 86.72% of the companies in the same industry.
The Debt to FCF ratio of DCI is 1.67, which is an excellent value as it means it would take DCI, only 1.67 years of fcf income to pay off all of its debts.
DCI has a Debt to FCF ratio of 1.67. This is in the better half of the industry: DCI outperforms 78.91% of its industry peers.
DCI has a Debt/Equity ratio of 0.36. This is a healthy value indicating a solid balance between debt and equity.
DCI has a Debt to Equity ratio (0.36) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.36 | ||
| Debt/FCF | 1.67 | ||
| Altman-Z | 6.86 |
ROIC/WACC1.84
WACC10.32%
2.3 Liquidity
DCI has a Current Ratio of 1.86. This is a normal value and indicates that DCI is financially healthy and should not expect problems in meeting its short term obligations.
DCI has a worse Current ratio (1.86) than 60.94% of its industry peers.
A Quick Ratio of 1.15 indicates that DCI should not have too much problems paying its short term obligations.
DCI has a Quick ratio (1.15) which 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 | 1.86 | ||
| Quick Ratio | 1.15 |
3. Growth
3.1 Past
DCI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 13.55%, 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.
DCI shows a small growth in Revenue. In the last year, the Revenue has grown by 4.46%.
Measured over the past years, DCI shows a small growth in Revenue. The Revenue has been growing by 4.74% on average per year.
EPS 1Y (TTM)13.55%
EPS 3Y13.81%
EPS 5Y9.03%
EPS Q2Q%2.47%
Revenue 1Y (TTM)4.46%
Revenue growth 3Y7.91%
Revenue growth 5Y4.74%
Sales Q2Q%-0.76%
3.2 Future
Based on estimates for the next years, DCI will show a small growth in Earnings Per Share. The EPS will grow by 6.78% on average per year.
Based on estimates for the next years, DCI will show a small growth in Revenue. The Revenue will grow by 4.26% on average per year.
EPS Next Y6.5%
EPS Next 2Y6.4%
EPS Next 3Y6.41%
EPS Next 5Y6.78%
Revenue Next Year1.74%
Revenue Next 2Y2.58%
Revenue Next 3Y2.94%
Revenue Next 5Y4.26%
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
DCI is valuated rather expensively with a Price/Earnings ratio of 20.01.
DCI's Price/Earnings ratio is a bit cheaper when compared to the industry. DCI is cheaper than 63.28% of the companies in the same industry.
DCI's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.60.
DCI is valuated rather expensively with a Price/Forward Earnings ratio of 18.19.
DCI's Price/Forward Earnings is on the same level as the industry average.
DCI's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.43.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.01 | ||
| Fwd PE | 18.19 |
4.2 Price Multiples
DCI's Enterprise Value to EBITDA is on the same level as the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as DCI.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.35 | ||
| EV/EBITDA | 13.46 |
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)3.08
PEG (5Y)2.22
EPS Next 2Y6.4%
EPS Next 3Y6.41%
5. Dividend
5.1 Amount
DCI has a Yearly Dividend Yield of 1.54%.
DCI's Dividend Yield is a higher than the industry average which is at 1.83.
DCI's Dividend Yield is slightly below the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.54% |
5.2 History
The dividend of DCI has a limited annual growth rate of 5.51%.
DCI has paid a dividend for at least 10 years, which is 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)5.51%
Div Incr Years28
Div Non Decr Years33
5.3 Sustainability
DCI pays out 30.40% of its income as dividend. This is a sustainable payout ratio.
DCI's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP30.4%
EPS Next 2Y6.4%
EPS Next 3Y6.41%
70.45
-0.43 (-0.61%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners87.86%
Inst Owner Change1.65%
Ins Owners0.51%
Ins Owner Change0.07%
Market Cap8.42B
Analysts70
Price Target71.6 (1.63%)
Short Float %2.17%
Short Ratio3.67
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.54% |
Yearly Dividend1.02
Dividend Growth(5Y)5.51%
DP30.4%
Div Incr Years28
Div Non Decr Years33
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.48%
Min EPS beat(2)-3.03%
Max EPS beat(2)0.06%
EPS beat(4)3
Avg EPS beat(4)2.82%
Min EPS beat(4)-3.03%
Max EPS beat(4)9.09%
EPS beat(8)6
Avg EPS beat(8)3.1%
EPS beat(12)7
Avg EPS beat(12)1.2%
EPS beat(16)9
Avg EPS beat(16)1.65%
Revenue beat(2)1
Avg Revenue beat(2)-2.46%
Min Revenue beat(2)-5.17%
Max Revenue beat(2)0.25%
Revenue beat(4)2
Avg Revenue beat(4)-1.59%
Min Revenue beat(4)-5.17%
Max Revenue beat(4)0.31%
Revenue beat(8)2
Avg Revenue beat(8)-1.5%
Revenue beat(12)5
Avg Revenue beat(12)-0.74%
Revenue beat(16)8
Avg Revenue beat(16)0.12%
PT rev (1m)-5.9%
PT rev (3m)-8.12%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.82%
EPS NY rev (1m)-0.03%
EPS NY rev (3m)-0.65%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.57%
Revenue NY rev (1m)-0.05%
Revenue NY rev (3m)-2.22%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.01 | ||
| Fwd PE | 18.19 | ||
| P/S | 2.32 | ||
| P/FCF | 24.35 | ||
| P/OCF | 19.55 | ||
| P/B | 5.45 | ||
| P/tB | 9.21 | ||
| EV/EBITDA | 13.46 |
EPS(TTM)3.52
EY5%
EPS(NY)3.87
Fwd EY5.5%
FCF(TTM)2.89
FCFY4.11%
OCF(TTM)3.6
OCFY5.12%
SpS30.4
BVpS12.92
TBVpS7.65
PEG (NY)3.08
PEG (5Y)2.22
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.12% | ||
| ROE | 27.07% | ||
| ROCE | 25.12% | ||
| ROIC | 19.01% | ||
| ROICexc | 20.76% | ||
| ROICexgc | 30.02% | ||
| OM | 15.18% | ||
| PM (TTM) | 11.51% | ||
| GM | 35.67% | ||
| FCFM | 9.52% |
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-Score7
Asset Turnover1.23
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.36 | ||
| Debt/FCF | 1.67 | ||
| Debt/EBITDA | 0.85 | ||
| Cap/Depr | 85% | ||
| Cap/Sales | 2.34% | ||
| Interest Coverage | 23.78 | ||
| Cash Conversion | 66.11% | ||
| Profit Quality | 82.71% | ||
| Current Ratio | 1.86 | ||
| Quick Ratio | 1.15 | ||
| Altman-Z | 6.86 |
F-Score7
WACC10.32%
ROIC/WACC1.84
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)13.55%
EPS 3Y13.81%
EPS 5Y9.03%
EPS Q2Q%2.47%
EPS Next Y6.5%
EPS Next 2Y6.4%
EPS Next 3Y6.41%
EPS Next 5Y6.78%
Revenue 1Y (TTM)4.46%
Revenue growth 3Y7.91%
Revenue growth 5Y4.74%
Sales Q2Q%-0.76%
Revenue Next Year1.74%
Revenue Next 2Y2.58%
Revenue Next 3Y2.94%
Revenue Next 5Y4.26%
EBIT growth 1Y10.56%
EBIT growth 3Y11.95%
EBIT growth 5Y7.13%
EBIT Next Year26.71%
EBIT Next 3Y12.05%
EBIT Next 5Y9.36%
FCF growth 1Y21.8%
FCF growth 3Y5.87%
FCF growth 5Y15.84%
OCF growth 1Y9.48%
OCF growth 3Y7.01%
OCF growth 5Y7.33%