Donaldson (DCI) versus Its Rivals Critical Comparison

Donaldson (NYSE:DCI) is one of 436 public companies in the “Machinery” industry, but how does it weigh in compared to its rivals? We will compare Donaldson to related businesses based on the strength of its earnings, valuation, institutional ownership, dividends, profitability, risk and analyst recommendations.

Valuation and Earnings

This table compares Donaldson and its rivals revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Donaldson	$3.89 billion	$453.80 million	22.50
Donaldson Competitors	$4.63 billion	$362.62 million	6.26

Donaldson’s rivals have higher revenue, but lower earnings than Donaldson. Donaldson is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Dividends

Donaldson pays an annual dividend of $1.28 per share and has a dividend yield of 1.5%. Donaldson pays out 33.2% of its earnings in the form of a dividend. As a group, “Machinery” companies pay a dividend yield of 2.8% and pay out 24.5% of their earnings in the form of a dividend. Donaldson has raised its dividend for 38 consecutive years. Donaldson lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Volatility & Risk

Donaldson has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, Donaldson’s rivals have a beta of 5.12, suggesting that their average share price is 412% more volatile than the S&P 500.

Institutional and Insider Ownership

82.8% of Donaldson shares are owned by institutional investors. Comparatively, 51.8% of shares of all “Machinery” companies are owned by institutional investors. 2.2% of Donaldson shares are owned by insiders. Comparatively, 14.1% of shares of all “Machinery” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Donaldson and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Donaldson	11.68%	28.68%	14.27%
Donaldson Competitors	-1,035.57%	-36.60%	-0.39%

Analyst Ratings

This is a summary of current ratings and price targets for Donaldson and its rivals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Donaldson	0	2	3	0	2.60
Donaldson Competitors	4216	14736	18264	809	2.41

Donaldson presently has a consensus price target of $101.67, suggesting a potential upside of 17.35%. As a group, “Machinery” companies have a potential upside of 30.87%. Given Donaldson’s rivals higher probable upside, analysts plainly believe Donaldson has less favorable growth aspects than its rivals.

Summary

Donaldson beats its rivals on 8 of the 15 factors compared.

Donaldson Company Profile

Donaldson Company, Inc. is a global manufacturer of filtration systems and replacement parts. Founded in 1915, the company serves customers in industries including agriculture, construction, mining, transportation, manufacturing, and life sciences. Its products include air, liquid, fuel, and lubricating-oil filters for engines and equipment, as well as dust-collection systems and filtration solutions for compressed air and gas. Donaldson also provides filtration technologies for applications such as food and beverage production, bioprocessing, and other life sciences uses.