Fact based stock research
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 75 (better than 75% compared with investment alternatives), Donaldson (Industrial Machinery, USA) shares have much better financial characteristics than comparable stocks. Shares of Donaldson are low in value (priced high) with a consolidated Value Rank of 49 (worse than 51% of alternatives). But they show above-average growth (Growth Rank of 71) and are safely financed (Safety Rank of 67, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 75, is a strong buy recommendation based on Donaldson's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Donaldson exhibits low value (Obermatt Value Rank of 49), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 71). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 67) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). 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	49
Growth Rank	71
Safety Rank	67
Combined Rank	75

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

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

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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	49
GROWTH
GROWTH	51	29	41	71
SAFETY
SAFETY	26	78	69	67
SENTIMENT
SENTIMENT	n/a	83	94	^new
360° VIEW
360° VIEW	n/a	75	76	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 31-Jul-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	49
GROWTH
GROWTH	51	29	41	71
SAFETY
SAFETY	26	78	69	67
COMBINED
COMBINED	23	54	58	75

Last update of combined financial performance: 14-Nov-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 49 (worse than 51% compared with alternatives), Donaldson shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Donaldson. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 79% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 44 which means that the stock price compared with what market professionals expect for future profits is higher than 56% of comparable companies, indicating a low value concerning Donaldson's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 48 which means that the stock price compared with what market professionals expect for future profit levels is higher than 52% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 12 is also low. Compared with invested capital, the stock price is higher than for 88% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 49, is a hold recommendation based on Donaldson's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Donaldson? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Donaldson only if they reasonably expect the low current profit levels to be transitory. 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 essential 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	44
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	64	42	45	48
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	14	22	5	12
DIVIDEND YIELD
DIVIDEND YIELD	69	73	80	79
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	52	49	41	49

Last update of Value Rank: 14-Nov-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 71 (better than 71% 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 65 which means that currently, professionals expect the company to grow more than 65% of its competitors. Capital Growth is also above 39% of competitors with a rank of 82, and Stock Returns with the rank of 61 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 71, 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	65
PROFIT GROWTH
PROFIT GROWTH	55	34	37	39
CAPITAL GROWTH
CAPITAL GROWTH	n/a	65	66	82
STOCK RETURNS
STOCK RETURNS	65	35	31	61
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	51	29	41	71

Last update of Growth Rank: 14-Nov-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 67 (better than 67% 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 29, 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 71% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 67 (better than 67% 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	29
LIQUIDITY
LIQUIDITY	47	93	88	84
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	26	78	69	67

Last update of Safety Rank: 14-Nov-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: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Donaldson.
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