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 127 industry peers in the Machinery industry. DCI has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. 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.
Each year in the past 5 years DCI has been profitable.
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 12.09%, DCI belongs to the top of the industry, outperforming 87.40% of the companies in the same industry.
The Return On Equity of DCI (24.75%) is better than 89.76% of its industry peers.
DCI's Return On Invested Capital of 18.57% is amongst the best of the industry. DCI outperforms 93.70% 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 10.54%.
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
DCI has a Profit Margin of 9.94%. This is in the better half of the industry: DCI outperforms 69.29% of its industry peers.
DCI's Profit Margin has improved in the last couple of years.
The Operating Margin of DCI (15.36%) is better than 72.44% of its industry peers.
DCI's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 35.39%, DCI is doing good in the industry, outperforming 63.78% 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
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.
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 6.71. This indicates that DCI is financially healthy and has little risk of bankruptcy at the moment.
DCI has a Altman-Z score of 6.71. This is amongst the best in the industry. DCI outperforms 86.61% 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 has a better Debt to FCF ratio (2.42) than 71.65% of its industry peers.
A Debt/Equity ratio of 0.49 indicates that DCI is not too dependend on debt financing.
The Debt to Equity ratio of DCI (0.49) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 2.42 | ||
| Altman-Z | 6.71 |
ROIC/WACC1.89
WACC9.82%
2.3 Liquidity
A Current Ratio of 1.94 indicates that DCI should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.94, DCI is in line with its industry, outperforming 46.46% of the companies in the same industry.
DCI has a Quick Ratio of 1.24. 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 Quick ratio (1.24) which is in line with its industry peers.
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
The Earnings Per Share has grown by an nice 10.12% over the past year.
DCI shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.03% yearly.
Looking at the last year, DCI shows a small growth in Revenue. The Revenue has grown by 3.26% in the last year.
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)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
Based on estimates for the next years, DCI will show a small growth in Earnings Per Share. The EPS will grow by 6.87% on average per year.
Based on estimates for the next years, DCI will show a small growth in Revenue. The Revenue will grow by 4.06% on average per year.
EPS Next Y7.98%
EPS Next 2Y6.79%
EPS Next 3Y7.31%
EPS Next 5Y6.87%
Revenue Next Year1.93%
Revenue Next 2Y2.73%
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.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 20.70 indicates a rather expensive valuation of DCI.
DCI's Price/Earnings ratio is a bit cheaper when compared to the industry. DCI is cheaper than 65.35% 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 26.86.
Based on the Price/Forward Earnings ratio of 19.06, the valuation of DCI can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of DCI is on the same level as its industry peers.
DCI's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 34.94.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.7 | ||
| Fwd PE | 19.06 |
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.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of DCI is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29 | ||
| EV/EBITDA | 13.82 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of DCI may justify a higher PE ratio.
PEG (NY)2.6
PEG (5Y)2.29
EPS Next 2Y6.79%
EPS Next 3Y7.31%
5. Dividend
5.1 Amount
DCI has a Yearly Dividend Yield of 1.62%.
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 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.62% |
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 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%
74.32
-0.69 (-0.92%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners91.07%
Inst Owner Change7.98%
Ins Owners0.5%
Ins Owner Change0.25%
Market Cap8.66B
Analysts53.33
Price Target74.07 (-0.34%)
Short Float %2.38%
Short Ratio5.29
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.62% |
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)3.45%
EPS NQ rev (1m)0.42%
EPS NQ rev (3m)0.58%
EPS NY rev (1m)0%
EPS NY rev (3m)1.39%
Revenue NQ rev (1m)0.23%
Revenue NQ rev (3m)0.27%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)0.19%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.7 | ||
| Fwd PE | 19.06 | ||
| P/S | 2.38 | ||
| P/FCF | 29 | ||
| P/OCF | 22.97 | ||
| P/B | 5.91 | ||
| P/tB | 9.92 | ||
| EV/EBITDA | 13.82 |
EPS(TTM)3.59
EY4.83%
EPS(NY)3.9
Fwd EY5.25%
FCF(TTM)2.56
FCFY3.45%
OCF(TTM)3.24
OCFY4.35%
SpS31.29
BVpS12.57
TBVpS7.49
PEG (NY)2.6
PEG (5Y)2.29
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 | 6.71 |
F-Score6
WACC9.82%
ROIC/WACC1.89
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 Year1.93%
Revenue Next 2Y2.73%
Revenue Next 3Y3.52%
Revenue Next 5Y4.06%
EBIT growth 1Y8%
EBIT growth 3Y11.95%
EBIT growth 5Y7.13%
EBIT Next Year26.62%
EBIT Next 3Y11.64%
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%