DONALDSON Co INC (NYSE: DCI)

Sector: Industrials Industry: Specialty Industrial Machinery CIK: 0000029644
Market Cap 16.71 Bn
P/B 17.50
P/E 79.33
P/S 7.65
ROIC (Qtr) 18.38
Div Yield % 0.51
Rev 1y % (Qtr) 3.92
Total Debt (Qtr) 680.50 Mn
Debt/Equity (Qtr) 0.45
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About

Donaldson Company, Inc., often recognized by its stock symbol DCI, operates in the technology-driven filtration products and solutions industry. With a rich history of innovation spanning over a century, Donaldson has established itself as a trusted partner for customers seeking reliable filtration solutions across various industries and advanced markets. The company's primary business activities revolve around creating and providing a broad range of filtration products and solutions through its three main segments: Mobile Solutions, Industrial...

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Investment thesis

Bull case

  • Strong operating cash flow of 471.30M provides robust 0.69x coverage of total debt 680.50M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 210.70M provide 23.41x coverage of short-term debt 9M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 471.30M provides exceptional 18.27x coverage of interest expenses 25.80M, showing strong debt service capability.
  • Operating cash flow of 471.30M provides strong 20.31x coverage of stock compensation 23.20M, indicating sustainable incentive practices.
  • Strong tangible asset base of 2.44B provides 3.58x coverage of total debt 680.50M, indicating robust asset backing and low credit risk.

Bear case

  • Operating cash flow of 471.30M barely covers its investment activities of (57.80M), with a coverage ratio of -8.15, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 471.30M provides thin coverage of dividend payments of (134.20M) with a -3.51 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 210.70M provide limited coverage of acquisition spending of (2.40M), which is -87.79x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 471.30M is outpaced by equity issuance of (309.90M) (-1.52 ratio), indicating concerning reliance on equity markets for funding operations.
  • Retained earnings of 2.72B provide limited buffer against comprehensive income items of (172.70M), which is -15.77x, indicating elevated exposure to market risks.

Segments Breakdown of Revenue (2025)

Geographical Breakdown of Revenue (2025)

Peer comparison

Companies in the Specialty Industrial Machinery
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GEV GE Vernova Inc. 224.93 Bn 194.57 6.14 0.00 Bn
2 ETN Eaton Corp plc 153.13 Bn 38.99 5.75 11.22 Bn
3 PH Parker-Hannifin Corp 135.87 Bn 165.29 12.09 9.87 Bn
4 EMR Emerson Electric Co 111.68 Bn 47.10 4.65 13.41 Bn
5 ITW Illinois Tool Works Inc 86.68 Bn 28.27 5.40 8.97 Bn
6 CMI Cummins Inc 82.13 Bn 28.89 2.44 7.55 Bn
7 AME Ametek Inc/ 53.79 Bn 36.34 7.27 2.28 Bn
8 ROK Rockwell Automation, Inc 43.80 Bn 44.24 5.11 3.68 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 5.54 2.28
EV to Cash from Ops. EV/CFO 75.33 37.14
EV to Debt EV to Debt 24.66 34.39
EV to EBIT EV/EBIT 54.65 27.71
EV to EBITDA EV/EBITDA 46.71 25.34
EV to Free Cash Flow [EV/FCF] EV/FCF 101.74 133.36
EV to Market Cap EV to Market Cap 1.00 1.04
EV to Revenue EV/Rev 7.68 39.88
Price to Book Value [P/B] P/B 17.50 6.22
Price to Earnings [P/E] P/E 79.33 143.63
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.85 2.57
Dividend Payout Ratio % Div Payout % (Qtr) 35.20 15.73
Dividend per Basic Share Div per Share (Qtr) 1.14 0.91
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 31.75 82.53
Interest Coverage Int. cover (Qtr) 20.74 12.34
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 36.33 -45.99
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -4.75 118.48
Dividend Growth (1y) % Div 1y % (Qtr) 44.30 10.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -8.28 -283.03
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -5.80 -36.87
EBIT Growth (1y) % EBIT 1y % (Qtr) -5.19 -80.72
EBT Growth (1y) % EBT 1y % (Qtr) -6.21 -120.93
EPS Growth (1y) % EPS 1y % (Qtr) -7.43 -39.22
FCF Growth (1y) % FCF 1y % (Qtr) 22.13 85.55
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 0.18 0.87
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.23 0.62
Cash Payout Ratio Cash Payout (Qtr) 0.25 0.10
Cash Ratio Cash Ratio (Qtr) 0.30 3.01
Current Ratio Curr Ratio (Qtr) 2.15 4.97
Debt to Equity Ratio Debt/Equity (Qtr) 0.45 0.38
Interest Cover Ratio Int Coverage (Qtr) 20.74 12.34
Times Interest Earned Times Interest Earned (Qtr) 20.74 12.34
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 17.00 -7,291.27
EBIT Margin % EBIT Margin % (Qtr) 14.36 -7,413.30
EBT Margin % EBT Margin % (Qtr) 13.67 -9,015.79
Gross Margin % Gross Margin % (Qtr) 34.80 -32.61
Net Profit Margin % Net Margin % (Qtr) 10.20 -7,962.06