DONALDSON CO INC (DCI) Stock Fundamental Analysis
NYSE:DCI - New York Stock Exchange, Inc. - US2576511099 - Common Stock - Currency: USD
Taking everything into account, DCI scores 7 out of 10 in our fundamental rating. DCI was compared to 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. DCI has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year DCI was profitable.
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
DCI has a better Return On Assets (12.09%) than 87.50% of its industry peers.
DCI has a Return On Equity of 24.75%. This is amongst the best in the industry. DCI outperforms 89.84% of its industry peers.
With an excellent Return On Invested Capital value of 18.57%, DCI belongs to the best of the industry, outperforming 92.97% of the companies in the same industry.
DCI had an Average Return On Invested Capital over the past 3 years of 18.29%. This is significantly above the industry average of 10.71%.
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
Looking at the Profit Margin, with a value of 9.94%, DCI is in the better half of the industry, outperforming 68.75% of the companies in the same industry.
DCI's Profit Margin has improved in the last couple of years.
The Operating Margin of DCI (15.36%) is better than 72.66% of its industry peers.
In the last couple of years the Operating Margin of DCI has grown nicely.
With a decent Gross Margin value of 35.39%, DCI is doing good in the industry, outperforming 63.28% of the companies in the same industry.
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 | 15.36% | ||
| 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so DCI is creating value.
The number of shares outstanding for DCI has been reduced compared to 1 year ago.
The number of shares outstanding for DCI has been reduced compared to 5 years ago.
The debt/assets ratio for DCI has been reduced compared to a year ago.
2.2 Solvency
DCI has an Altman-Z score of 6.65. This indicates that DCI is financially healthy and has little risk of bankruptcy at the moment.
DCI has a better Altman-Z score (6.65) than 85.94% of its industry peers.
The Debt to FCF ratio of DCI is 2.42, which is a good value as it means it would take DCI, 2.42 years of fcf income to pay off all of its debts.
DCI's Debt to FCF ratio of 2.42 is fine compared to the rest of the industry. DCI outperforms 70.31% of its industry peers.
A Debt/Equity ratio of 0.49 indicates that DCI is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.49, DCI is in line with its industry, outperforming 44.53% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 2.42 | ||
| Altman-Z | 6.65 |
ROIC/WACC1.91
WACC9.71%
2.3 Liquidity
A Current Ratio of 1.94 indicates that DCI should not have too much problems paying its short term obligations.
With a Current ratio value of 1.94, DCI perfoms like the industry average, outperforming 46.88% of the companies in the same industry.
A Quick Ratio of 1.24 indicates that DCI should not have too much problems paying its short term obligations.
DCI has a Quick ratio of 1.24. This is comparable to the rest of the industry: DCI outperforms 53.13% of its industry peers.
The current and quick ratio evaluation for DCI is rather negative, while it does have 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.
DCI shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.03% yearly.
DCI shows a small growth in Revenue. In the last year, the Revenue has grown by 3.26%.
DCI shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.74% yearly.
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.
Based on estimates for the next years, DCI will show a small growth in Revenue. The Revenue will grow by 4.06% on average per year.
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 3Y3.52%
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 19.85, which indicates a rather expensive current valuation of DCI.
Based on the Price/Earnings ratio, DCI is valued a bit cheaper than 67.19% of the companies in the same industry.
DCI is valuated rather cheaply when we compare the Price/Earnings ratio to 27.45, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 18.27, DCI is valued on the expensive side.
DCI's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. DCI is cheaper than 61.72% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.90, DCI is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.85 | ||
| Fwd PE | 18.27 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of DCI is on the same level as its industry peers.
DCI's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.52 | ||
| EV/EBITDA | 13.6 |
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.
DCI has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.49
PEG (5Y)2.2
EPS Next 2Y6.79%
EPS Next 3Y7.31%
5. Dividend
5.1 Amount
DCI has a Yearly Dividend Yield of 1.72%.
Compared to an average industry Dividend Yield of 1.87, DCI pays a bit more dividend than its industry peers.
Compared to the average S&P500 Dividend Yield of 2.42, DCI is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.72% |
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 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
35.71% of the earnings are spent on dividend by DCI. This is a low number and 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%
71.26
+0.1 (+0.14%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners91.04%
Inst Owner Change1.52%
Ins Owners0.49%
Ins Owner Change0.19%
Market Cap8.52B
Analysts52.86
Price Target74.21 (4.14%)
Short Float %2.13%
Short Ratio4.75
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.72% |
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)3.63%
PT rev (3m)-2.48%
EPS NQ rev (1m)0.16%
EPS NQ rev (3m)-0.09%
EPS NY rev (1m)1.39%
EPS NY rev (3m)0.58%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)-0.84%
Revenue NY rev (1m)0.16%
Revenue NY rev (3m)-0.64%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.85 | ||
| Fwd PE | 18.27 | ||
| P/S | 2.34 | ||
| P/FCF | 28.52 | ||
| P/OCF | 22.59 | ||
| P/B | 5.82 | ||
| P/tB | 9.76 | ||
| EV/EBITDA | 13.6 |
EPS(TTM)3.59
EY5.04%
EPS(NY)3.9
Fwd EY5.47%
FCF(TTM)2.5
FCFY3.51%
OCF(TTM)3.15
OCFY4.43%
SpS30.5
BVpS12.25
TBVpS7.3
PEG (NY)2.49
PEG (5Y)2.2
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 | 6.65 |
F-Score6
WACC9.71%
ROIC/WACC1.91
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 3Y3.52%
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%