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Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Donaldson Company, Inc. (NYSE:DCI) due to its excellent fundamentals in more than one area. DCI is a financially-healthy , dividend-paying company with a a strong track record of performance. Below is a brief commentary on these key aspects. If you're interested in understanding beyond my broad commentary, read the full report on Donaldson Company here.
Established dividend payer with adequate balance sheet
DCI delivered a triple-digit bottom-line expansion over the past couple of years, with its most recent earnings level surpassing its average level over the last five years. The strong earnings growth is reflected in impressive double-digit 35% return to shareholders, which is what investors like to see! DCI is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that DCI manages its cash and cost levels well, which is a key determinant of the company’s health. DCI appears to have made good use of debt, producing operating cash levels of 0.42x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
For those seeking income streams from their portfolio, DCI is a robust dividend payer as well. Over the past decade, the company has consistently increased its dividend payout, reaching a yield of 1.4%.
For Donaldson Company, I've compiled three essential factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for DCI’s future growth? Take a look at our free research report of analyst consensus for DCI’s outlook.
- Valuation: What is DCI worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether DCI is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of DCI? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.