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Donaldson (NYSE:DCI)

US2576511099

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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Donaldson stock research in summary

donaldson.com

ANALYSIS: With an Obermatt Combined Rank of 70 (better than 70% compared with investment alternatives), Donaldson (Industrial Machinery, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Donaldson are a good value (attractively priced) with a consolidated Value Rank of 55 (better than 55% of alternatives), show above-average growth (Growth Rank of 57), and are safely financed (Safety Rank of 69), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 70, is a buy recommendation based on Donaldson's financial characteristics. As the company Donaldson's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 55), above-average growth (Obermatt Growth Rank of 57), and indicate that the company is safely financed (Obermatt Safety Rank of 69), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of Donaldson. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	55
Growth Rank	57
Safety Rank	69
Combined Rank	70

Country	USA
Industry	Industrial Machinery
Index	S&P MIDCAP
Size class	X-Large

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Donaldson

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	52	49	41	55
GROWTH
GROWTH	51	29	41	57
SAFETY
SAFETY	26	78	69	69
SENTIMENT
SENTIMENT	n/a	83	94	^new
360° VIEW
360° VIEW	n/a	75	76	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 31-Oct-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Donaldson is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	52	49	41	55
GROWTH
GROWTH	51	29	41	57
SAFETY
SAFETY	26	78	69	69
COMBINED
COMBINED	23	54	58	70

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Donaldson the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 55 (better than 55% compared with alternatives), Donaldson shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Donaldson. Price-to-Profit (also referred to as price-earnings, P/E) is 50 which means that the stock price compared with what market professionals expect for future profits is lower than for 50% of comparable companies, indicating a good value concerning Donaldson's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 15, which means that the stock price is lower as regards to invested capital than for 15% of comparable investments. On the other hand, Price-to-Sales is less favorable than 52% of alternatives (only 48% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 19% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 55, is a buy recommendation based on Donaldson's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	54	43	40	48
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	64	42	45	50
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	14	22	5	15
DIVIDEND YIELD
DIVIDEND YIELD	69	73	80	81
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	52	49	41	55

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Donaldson; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 57 (better than 57% compared with alternatives), Donaldson shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Donaldson. Sales Growth has a rank of 59 which means that currently, professionals expect the company to grow more than 59% of its competitors. Capital Growth is also above 39% of competitors with a rank of 65, and Stock Returns with the rank of 51 is also an outperformance. Only Profit Growth is low with a rank of 39 which means that currently, professionals expect the company to grow its profits less than 61% of its competitors. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 57, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, Donaldson is a good growth stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	39	26	58	59
PROFIT GROWTH
PROFIT GROWTH	55	34	37	39
CAPITAL GROWTH
CAPITAL GROWTH	n/a	65	66	65
STOCK RETURNS
STOCK RETURNS	65	35	31	51
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	51	29	41	57

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Donaldson.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 69 (better than 69% compared with alternatives), the company Donaldson has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Donaldson is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Donaldson. Leverage is at a rank of 64, meaning the company has a below-average debt-to-equity ratio. It has less debt than 64% of its competitors. Liquidity is also good at a rank of 84, meaning the company generates more profit to service its debt than 84% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 31, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 69% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 69 (better than 69% compared with alternatives), Donaldson has a financing structure that is safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Donaldson. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with Donaldson and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	29	54	60	64
REFINANCING
REFINANCING	43	37	9	31
LIQUIDITY
LIQUIDITY	47	93	88	84
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	26	78	69	69

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Donaldson and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	28	13	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	94	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	95	98	^new
MARKET PULSE
MARKET PULSE	n/a	82	93	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	83	94	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Donaldson.
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