DONALDSON CO INC (DCI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:DCI - US2576511099 - Common Stock
100.83 USD
-1.54 (-1.5%)
100.83 USD
0 (0%)
We assign a fundamental rating of 6 out of 10 to DCI. DCI was compared to 132 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 is quite expensive at the moment. It does show a decent growth rate.
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.
- 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
- The Return On Assets of DCI (12.62%) is better than 89.39% of its industry peers.
- DCI has a better Return On Equity (25.18%) than 92.42% of its industry peers.
- DCI has a better Return On Invested Capital (18.75%) than 93.94% 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 10.24%.
- The last Return On Invested Capital (18.75%) for DCI is above the 3 year average (18.70%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.62% | ||
| ROE | 25.18% | ||
| ROIC | 18.75% |
ROA(3y)13.16%
ROA(5y)12.85%
ROE(3y)26.74%
ROE(5y)26.96%
ROIC(3y)18.7%
ROIC(5y)17.86%
1.3 Margins
- DCI's Profit Margin of 10.25% is fine compared to the rest of the industry. DCI outperforms 71.97% of its industry peers.
- In the last couple of years the Profit Margin of DCI has remained more or less at the same level.
- DCI has a Operating Margin of 15.40%. This is in the better half of the industry: DCI outperforms 71.21% of its industry peers.
- DCI's Operating Margin has improved in the last couple of years.
- DCI has a Gross Margin of 34.96%. This is in the better half of the industry: DCI outperforms 62.88% of its industry peers.
- DCI's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.4% | ||
| PM (TTM) | 10.25% | ||
| GM | 34.96% |
OM growth 3Y4.36%
OM growth 5Y3.01%
PM growth 3Y-0.4%
PM growth 5Y-0.02%
GM growth 3Y2.72%
GM growth 5Y0.74%
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.
- DCI has less shares outstanding than it did 1 year ago.
- DCI has less shares outstanding than it did 5 years ago.
- Compared to 1 year ago, DCI has a worse debt to assets ratio.
2.2 Solvency
- DCI has an Altman-Z score of 8.15. This indicates that DCI is financially healthy and has little risk of bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 8.15, DCI belongs to the top of the industry, outperforming 90.15% of the companies in the same industry.
- The Debt to FCF ratio of DCI is 1.69, which is an excellent value as it means it would take DCI, only 1.69 years of fcf income to pay off all of its debts.
- Looking at the Debt to FCF ratio, with a value of 1.69, DCI belongs to the top of the industry, outperforming 81.06% of the companies in the same industry.
- A Debt/Equity ratio of 0.44 indicates that DCI is not too dependend on debt financing.
- The Debt to Equity ratio of DCI (0.44) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.44 | ||
| Debt/FCF | 1.69 | ||
| Altman-Z | 8.15 |
ROIC/WACC1.94
WACC9.66%
2.3 Liquidity
- A Current Ratio of 2.15 indicates that DCI has no problem at all paying its short term obligations.
- DCI has a Current ratio (2.15) which is in line with its industry peers.
- DCI has a Quick Ratio of 1.39. This is a normal value and indicates that DCI is financially healthy and should not expect problems in meeting its short term obligations.
- The Quick ratio of DCI (1.39) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.15 | ||
| Quick Ratio | 1.39 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 8.29% over the past year.
- The Earnings Per Share has been growing by 12.86% on average over the past years. This is quite good.
- DCI shows a small growth in Revenue. In the last year, the Revenue has grown by 2.37%.
- DCI shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.41% yearly.
EPS 1Y (TTM)8.29%
EPS 3Y11.01%
EPS 5Y12.86%
EPS Q2Q%13.25%
Revenue 1Y (TTM)2.37%
Revenue growth 3Y3.73%
Revenue growth 5Y7.41%
Sales Q2Q%3.92%
3.2 Future
- The Earnings Per Share is expected to grow by 8.19% on average over the next years. This is quite good.
- Based on estimates for the next years, DCI will show a small growth in Revenue. The Revenue will grow by 4.30% on average per year.
EPS Next Y10.88%
EPS Next 2Y10.14%
EPS Next 3Y9.53%
EPS Next 5Y8.19%
Revenue Next Year4.46%
Revenue Next 2Y4.59%
Revenue Next 3Y4.64%
Revenue Next 5Y4.3%
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 26.60, which means the current valuation is very expensive for DCI.
- DCI's Price/Earnings is on the same level as the industry average.
- DCI's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.21.
- Based on the Price/Forward Earnings ratio of 22.59, 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 similar valuation than the S&P500 average which is at 24.26.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.6 | ||
| Fwd PE | 22.59 |
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 | 28.97 | ||
| EV/EBITDA | 18.33 |
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)2.45
PEG (5Y)2.07
EPS Next 2Y10.14%
EPS Next 3Y9.53%
5. Dividend
5.1 Amount
- DCI has a Yearly Dividend Yield of 1.19%.
- DCI's Dividend Yield is a higher than the industry average which is at 0.98.
- DCI's Dividend Yield is slightly below the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.19% |
5.2 History
- The dividend of DCI has a limited annual growth rate of 5.89%.
- DCI has been paying a dividend for at least 10 years, so it has 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)5.89%
Div Incr Years29
Div Non Decr Years34
5.3 Sustainability
- 35.14% 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.
DP35.14%
EPS Next 2Y10.14%
EPS Next 3Y9.53%
DONALDSON CO INC / DCI FAQ
What is the fundamental rating for DCI stock?
ChartMill assigns a fundamental rating of 6 / 10 to DCI.
What is the valuation status for DCI stock?
ChartMill assigns a valuation rating of 3 / 10 to DONALDSON CO INC (DCI). This can be considered as Overvalued.
Can you provide the profitability details for DONALDSON CO INC?
DONALDSON CO INC (DCI) has a profitability rating of 8 / 10.
What is the financial health of DONALDSON CO INC (DCI) stock?
The financial health rating of DONALDSON CO INC (DCI) is 7 / 10.
What is the earnings growth outlook for DONALDSON CO INC?
The Earnings per Share (EPS) of DONALDSON CO INC (DCI) is expected to grow by 10.88% in the next year.