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. DCI has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
DCI had positive earnings in the past year.
In the past year DCI had a positive cash flow from operations.
In the past 5 years DCI has always been profitable.
DCI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
DCI has a Return On Assets of 14.12%. This is amongst the best in the industry. DCI outperforms 92.97% of its industry peers.
DCI has a Return On Equity of 27.07%. This is amongst the best in the industry. DCI outperforms 90.63% of its industry peers.
DCI's Return On Invested Capital of 19.01% is amongst the best of the industry. DCI outperforms 93.75% 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 10.75%.
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 75.00% 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 73.44% of its industry peers.
DCI's Operating Margin has improved in the last couple of years.
The Gross Margin of DCI (35.67%) is better than 64.06% 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), DCI is creating value.
DCI has less shares outstanding than it did 1 year ago.
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 6.42. This indicates that DCI is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of DCI (6.42) is better than 87.50% of its industry peers.
DCI has a debt to FCF ratio of 1.67. This is a very positive value and a sign of high solvency as it would only need 1.67 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.67, DCI is in the better half of the industry, outperforming 79.69% of the companies in the same industry.
DCI has a Debt/Equity ratio of 0.36. This is a healthy value indicating a solid balance between debt and equity.
DCI's Debt to Equity ratio of 0.36 is in line compared to the rest of the industry. DCI outperforms 55.47% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.36 | ||
| Debt/FCF | 1.67 | ||
| Altman-Z | 6.42 |
ROIC/WACC1.94
WACC9.79%
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.
With a Current ratio value of 1.86, DCI is not doing good in the industry: 61.72% of the companies in the same industry are doing better.
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 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 | 1.86 | ||
| 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
The Earnings Per Share is expected to grow by 6.78% on average over the next years.
The Revenue is expected to grow by 4.26% on average over the next years.
EPS Next Y6.54%
EPS Next 2Y6.66%
EPS Next 3Y6.41%
EPS Next 5Y6.78%
Revenue Next Year1.79%
Revenue Next 2Y2.73%
Revenue Next 3Y3.06%
Revenue Next 5Y4.26%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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 17.53, which indicates a rather expensive current valuation of DCI.
Compared to the rest of the industry, the Price/Earnings ratio of DCI is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 27.63, DCI is valued a bit cheaper.
DCI is valuated correctly with a Price/Forward Earnings ratio of 15.86.
Based on the Price/Forward Earnings ratio, DCI is valued a bit cheaper than 65.63% of the companies in the same industry.
DCI is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 20.85, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.53 | ||
| Fwd PE | 15.86 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as DCI.
DCI's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.33 | ||
| EV/EBITDA | 11.86 |
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)2.68
PEG (5Y)1.94
EPS Next 2Y6.66%
EPS Next 3Y6.41%
5. Dividend
5.1 Amount
DCI has a Yearly Dividend Yield of 1.72%.
Compared to an average industry Dividend Yield of 2.12, DCI pays a bit more dividend than its industry peers.
Compared to the average S&P500 Dividend Yield of 2.51, 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 Years28
Div Non Decr Years33
5.3 Sustainability
30.40% of the earnings are spent on dividend by DCI. This is a low number and sustainable payout ratio.
DCI's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP30.4%
EPS Next 2Y6.66%
EPS Next 3Y6.41%
61.7
-1.04 (-1.66%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners87.86%
Inst Owner Change0.05%
Ins Owners0.51%
Ins Owner Change0.07%
Market Cap7.37B
Analysts70
Price Target76.09 (23.32%)
Short Float %1.71%
Short Ratio3.53
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.72% |
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)0%
PT rev (3m)-3.12%
EPS NQ rev (1m)-0.53%
EPS NQ rev (3m)-0.79%
EPS NY rev (1m)-0.62%
EPS NY rev (3m)-0.62%
Revenue NQ rev (1m)-0.46%
Revenue NQ rev (3m)-2.3%
Revenue NY rev (1m)-0.75%
Revenue NY rev (3m)-2.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.53 | ||
| Fwd PE | 15.86 | ||
| P/S | 2.03 | ||
| P/FCF | 21.33 | ||
| P/OCF | 17.12 | ||
| P/B | 4.77 | ||
| P/tB | 8.07 | ||
| EV/EBITDA | 11.86 |
EPS(TTM)3.52
EY5.71%
EPS(NY)3.89
Fwd EY6.31%
FCF(TTM)2.89
FCFY4.69%
OCF(TTM)3.6
OCFY5.84%
SpS30.4
BVpS12.92
TBVpS7.65
PEG (NY)2.68
PEG (5Y)1.94
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 | 6.42 |
F-Score7
WACC9.79%
ROIC/WACC1.94
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 Y6.54%
EPS Next 2Y6.66%
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 Year1.79%
Revenue Next 2Y2.73%
Revenue Next 3Y3.06%
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%