Donaldson Company (NYSE:DCI) - Share price, News & Analysis

DCI fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	2/6
Past Performance	6/6
Financial Health	5/6
Dividends	5/6

DCI Stock Overview

Donaldson Company, Inc. manufactures and sells filtration systems and replacement parts worldwide.

Rewards

Trading at 33.7% below our estimate of its fair value

Earnings are forecast to grow 9.17% per year

Earnings grew by 29.3% over the past year

Pays a reliable dividend of 1.77%

Risk Analysis

Has a high level of debt

Donaldson Company Competitors

Nordson

NasdaqGS:NDSN

US$11.9b

Lincoln Electric Holdings

NasdaqGS:LECO

US$7.6b

ITT

NYSE:ITT

US$5.8b

Barnes Group

NYSE:B

US$1.7b

Price History & Performance

Summary of all time highs, changes and price drops for Donaldson Company
Historical stock prices
Current Share Price	US$49.80
52 Week High	US$69.35
52 Week Low	US$48.14
Beta	1.28
1 Month Change	-5.56%
3 Month Change	-7.04%
1 Year Change	-17.82%
3 Year Change	3.34%
5 Year Change	6.68%
Change since IPO	5,332.73%

Recent News & Updates

Apr 12

Donaldson Company (NYSE:DCI) Looks To Prolong Its Impressive Returns

If you're looking for a multi-bagger, there's a few things to keep an eye out for. Firstly, we'll want to see a proven...

Apr 07

Donaldson Deserves A Second Look After A Steep Decline

Donaldson shares have significantly unperformed the industrial sector, but an improving revenue outlook is mitigating a lot of the short-term margin pressures the company is experiencing. In the short term, Donaldson is leveraged to a strong cycle in multiple off-highway commercial vehicle categories, while higher emissions standards can continue to drive on-highway growth. The "sizzle" to the Donaldson story is in the company's efforts to repurpose its core filtration technologies to new growth markets, including food/beverage and biopharma. Mid-single-digit revenue growth and modest margin leverage can support a fair value above $60.

Mar 14

At US$50.12, Is It Time To Put Donaldson Company, Inc. (NYSE:DCI) On Your Watch List?

While Donaldson Company, Inc. ( NYSE:DCI ) might not be the most widely known stock at the moment, it saw significant...

Shareholder Returns

	DCI	US Machinery	US Market
7D	0.3%	-4.1%	-2.7%
1Y	-17.8%	-19.3%	-12.9%

Return vs Industry: DCI exceeded the US Machinery industry which returned -19.3% over the past year.

Return vs Market: DCI underperformed the US Market which returned -12.9% over the past year.

Price Volatility

Is DCI's price volatile compared to industry and market?
DCI volatility
DCI Average Weekly Movement	4.2%
Machinery Industry Average Movement	5.7%
Market Average Movement	7.9%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	3.0%

Stable Share Price: DCI is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: DCI's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1915	13,100	Tod Carpenter	https://www.donaldson.com

Donaldson Company, Inc. manufactures and sells filtration systems and replacement parts worldwide. The company operates through two segments, Engine Products and Industrial Products. Its Engine Products segment provides replacement filters for air and liquid filtration applications; air filtration systems; liquid filtration systems for fuel, lube, and hydraulic applications; exhaust and emissions systems and sensors; indicators; and monitoring systems.

Donaldson Company Fundamentals Summary

How do Donaldson Company's earnings and revenue compare to its market cap?
DCI fundamental statistics
Market Cap	US$6.15b
Earnings (TTM)	US$317.60m
Revenue (TTM)	US$3.10b

19.4x

P/E Ratio

2.0x

P/S Ratio

Is DCI overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
DCI income statement (TTM)
Revenue	US$3.10b
Cost of Revenue	US$2.07b
Gross Profit	US$1.03b
Other Expenses	US$712.90m
Earnings	US$317.60m

Last Reported Earnings

Jan 31, 2022

Next Earnings Date

Jun 01, 2022

Earnings per share (EPS)	2.57
Gross Margin	33.23%
Net Profit Margin	10.24%
Debt/Equity Ratio	55.3%

How did DCI perform over the long term?

See historical performance and comparison

Dividends

1.8%

Current Dividend Yield

35%

Payout Ratio

Valuation

Is Donaldson Company undervalued compared to its fair value and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

33.7%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: DCI ($49.8) is trading below our estimate of fair value ($75.06)

Significantly Below Fair Value: DCI is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: DCI is good value based on its PE Ratio (19.4x) compared to the US Machinery industry average (21.3x).

PE vs Market: DCI is poor value based on its PE Ratio (19.4x) compared to the US market (15.3x).

Price to Earnings Growth Ratio

PEG Ratio: DCI is poor value based on its PEG Ratio (2.1x)

Price to Book Ratio

PB vs Industry: DCI is overvalued based on its PB Ratio (5.5x) compared to the US Machinery industry average (2.1x).

Future Growth

How is Donaldson Company forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

9.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: DCI's forecast earnings growth (9.2% per year) is above the savings rate (1.9%).

Earnings vs Market: DCI's earnings (9.2% per year) are forecast to grow slower than the US market (12.5% per year).

High Growth Earnings: DCI's earnings are forecast to grow, but not significantly.

Revenue vs Market: DCI's revenue (6% per year) is forecast to grow slower than the US market (7.8% per year).

High Growth Revenue: DCI's revenue (6% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: DCI's Return on Equity is forecast to be high in 3 years time (30.9%)

Past Performance

How has Donaldson Company performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

8.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: DCI has high quality earnings.

Growing Profit Margin: DCI's current net profit margins (10.2%) are higher than last year (9.6%).

Past Earnings Growth Analysis

Earnings Trend: DCI's earnings have grown by 8.2% per year over the past 5 years.

Accelerating Growth: DCI's earnings growth over the past year (29.3%) exceeds its 5-year average (8.2% per year).

Earnings vs Industry: DCI earnings growth over the past year (29.3%) exceeded the Machinery industry 24%.

Return on Equity

High ROE: DCI's Return on Equity (28.4%) is considered high.

Financial Health

How is Donaldson Company's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: DCI's short term assets ($1.3B) exceed its short term liabilities ($638.5M).

Long Term Liabilities: DCI's short term assets ($1.3B) exceed its long term liabilities ($736.0M).

Debt to Equity History and Analysis

Debt Level: DCI's net debt to equity ratio (40.1%) is considered high.

Reducing Debt: DCI's debt to equity ratio has reduced from 72.9% to 55.3% over the past 5 years.

Debt Coverage: DCI's debt is well covered by operating cash flow (45.2%).

Interest Coverage: DCI's interest payments on its debt are well covered by EBIT (31.5x coverage).

Balance Sheet

Dividend

What is Donaldson Company current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.77%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: DCI's dividend (1.77%) is higher than the bottom 25% of dividend payers in the US market (1.58%).

High Dividend: DCI's dividend (1.77%) is low compared to the top 25% of dividend payers in the US market (4.11%).

Stability and Growth of Payments

Stable Dividend: DCI's dividends per share have been stable in the past 10 years.

Growing Dividend: DCI's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (34.7%), DCI's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (50%), DCI's dividend payments are covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

6.4yrs

Average management tenure

CEO

Tod Carpenter (62 yo)

7.08yrs

Tenure

US$6,878,950

Compensation

Mr. Tod E. Carpenter has been the Chief Executive Officer and President of Donaldson Company, Inc. since April 1, 2015. He serves as Independent Director at AMETEK, Inc. since June 17, 2019. Mr. Carpenter...

CEO Compensation Analysis

Compensation vs Market: Tod's total compensation ($USD6.88M) is about average for companies of similar size in the US market ($USD8.23M).

Compensation vs Earnings: Tod's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: DCI's management team is seasoned and experienced (6.4 years average tenure).

Board Members

Experienced Board: DCI's board of directors are considered experienced (7.7 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/21 00:00
End of Day Share Price	2022/05/20 00:00
Earnings	2022/01/31
Annual Earnings	2021/07/31