We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Consider Investing in Donaldson (DCI)
Read MoreHide Full Article
Donaldson Company, Inc. (DCI - Free Report) currently boasts robust prospects on strength in its businesses, solid product portfolio, growth investments and a sound capital-deployment strategy.
The Zacks Rank #2 (Buy) company has a market capitalization of $8.2 billion. In the past three months, it has gained 7.7% against the industry’s decline of 0.5%.
Image Source: Zacks Investment Research
Let’s delve into the factors that make investment in the company a smart choice at the moment.
Business Strength: Donaldson has been witnessing strength across its On-Road, Off-Road and Aftermarket businesses, owing to solid demand for its products in the end markets. In the quarters ahead, the company is expected to benefit from its strong portfolio of products, solid backlog, focus on innovation, and growth investments. For fiscal 2021 (ending July 2021), it expects its sales to increase 9-11% year over year, higher than 5-8% estimated earlier.
Strong Cash Flows: The company’s ability to generate solid cash flows adds to its strength. Its free cash flow increased 51.1% year over year to $93.5 million in third-quarter fiscal 2021 (ended April 2021) and expanded 66.9% to $265.4 million in the first three quarters of fiscal 2021. For fiscal 2021, it expects free cash flow conversion of more than 100%.
Rewards to Shareholders: It remains committed to rewarding shareholders through dividend payouts and share repurchases. In the first three fiscal quarters, the company paid out dividends worth $79.5 million and repurchased shares worth $78.7 million. Also, in May 2021, it announced a 4.8% hike in its quarterly dividend rate.
Debt Reduction Efforts: The company remains focused on reducing its debt level. Exiting the fiscal third quarter, Donaldson’s debt was $454.6 million, reflecting 8.2% decline on a sequential basis. In the first three fiscal quarters, it repaid long-term debt of $165 million.
The Zacks Consensus Estimate for Donaldson’s earnings is pegged at $2.32 for fiscal 2021, up 4.5% from the 60-day-ago figure. The consensus estimate for fiscal 2022 (ending July 2022) earnings is pegged at $2.72, up 5.4% over the same time frame.
Image: Bigstock
Here's Why You Should Consider Investing in Donaldson (DCI)
Donaldson Company, Inc. (DCI - Free Report) currently boasts robust prospects on strength in its businesses, solid product portfolio, growth investments and a sound capital-deployment strategy.
The Zacks Rank #2 (Buy) company has a market capitalization of $8.2 billion. In the past three months, it has gained 7.7% against the industry’s decline of 0.5%.
Image Source: Zacks Investment Research
Let’s delve into the factors that make investment in the company a smart choice at the moment.
Business Strength: Donaldson has been witnessing strength across its On-Road, Off-Road and Aftermarket businesses, owing to solid demand for its products in the end markets. In the quarters ahead, the company is expected to benefit from its strong portfolio of products, solid backlog, focus on innovation, and growth investments. For fiscal 2021 (ending July 2021), it expects its sales to increase 9-11% year over year, higher than 5-8% estimated earlier.
Strong Cash Flows: The company’s ability to generate solid cash flows adds to its strength. Its free cash flow increased 51.1% year over year to $93.5 million in third-quarter fiscal 2021 (ended April 2021) and expanded 66.9% to $265.4 million in the first three quarters of fiscal 2021. For fiscal 2021, it expects free cash flow conversion of more than 100%.
Rewards to Shareholders: It remains committed to rewarding shareholders through dividend payouts and share repurchases. In the first three fiscal quarters, the company paid out dividends worth $79.5 million and repurchased shares worth $78.7 million. Also, in May 2021, it announced a 4.8% hike in its quarterly dividend rate.
Debt Reduction Efforts: The company remains focused on reducing its debt level. Exiting the fiscal third quarter, Donaldson’s debt was $454.6 million, reflecting 8.2% decline on a sequential basis. In the first three fiscal quarters, it repaid long-term debt of $165 million.
The Zacks Consensus Estimate for Donaldson’s earnings is pegged at $2.32 for fiscal 2021, up 4.5% from the 60-day-ago figure. The consensus estimate for fiscal 2022 (ending July 2022) earnings is pegged at $2.72, up 5.4% over the same time frame.
Other Stocks to Consider
Some other top-ranked stocks from the Zacks Industrial Products sector are Applied Industrial Technologies, Inc. (AIT - Free Report) , Flowserve Corporation (FLS - Free Report) and Tetra Tech, Inc. (TTEK - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Applied Industrial delivered a positive earnings surprise of 30.33%, on average, in the trailing four quarters.
Flowserve delivered a positive earnings surprise of 33.19%, on average, in the trailing four quarters.
Tetra Tech delivered an earnings surprise of 11.74%, on average, in the trailing four quarters.