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Reasons to Add Donaldson (DCI) Stock to Your Portfolio Now
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Donaldson Company, Inc. (DCI - Free Report) is well poised for growth courtesy of strength across its businesses, strategic acquisitions, and focus on improving the product line and operational excellence.
Image Source: Zacks Investment Research
The company has a market capitalization of $8.7 billion. Over the past six months, it has gained 14.2% compared with the industry’s growth of 11.7%. DCI currently carries a Zacks Rank #2 (Buy)
Let’s delve into the factors that have been aiding the firm for a while now.
Business Strength: Donaldson has been benefiting from strong dust collection sales and strength in the industrial filtration solutions business. Strength in the company’s aftermarket business and recovery in Disk Drive market demand are expected to drive its performance in the quarters ahead. Increasing defense sales within the Aerospace and Defense business also bode well for the company. For fiscal 2024 (ending July 2024), management expects overall sales to increase 3-7% from the year-ago levels.
Acquisition Benefits: The company intends to strengthen and expand its businesses through buyouts. In June 2023, DCI acquired Univercells Technologies, thereby expanding its growing offering in the life sciences industry. Also, in February 2023, it acquired Isolere Bio. This buyout enables Donaldson to create leading separation and filtration solutions for genetic-based drugs.
Shareholder-Friendly Policies: Donaldson is committed to rewarding shareholders through dividend payouts and share repurchases. In the first six months of fiscal 2024 (ended January 2024), the company paid out dividends of $60.3 million and repurchased shares for $87.1 million. Also, in May 2023, it hiked its quarterly dividend rate by 8.7%. This apart, in November 2023, it announced a new repurchase program, authorizing to repurchase up to 12 million shares of its common stock.
Estimate Revisions: In the past 30 days, the Zacks Consensus Estimate for Donaldson’s fiscal 2024 earnings has trended up from $3.20 to $3.28 on five upward estimate revisions against none downward. The consensus estimate for fiscal 2025 (ending July 2025) earnings increased from $3.55 to $3.64 on four upward estimate revisions against none downward.
Other Stocks to Consider
Some other top-ranked companies from the same space are discussed below:
It delivered a trailing four-quarter average earnings surprise of 20.3%. In the past 60 days, the Zacks Consensus Estimate for Atmus Filtration’s 2024 earnings has increased 2%.
Tetra Tech, Inc. (TTEK - Free Report) currently carries a Zacks Rank #2. It delivered a trailing four-quarter average earnings surprise of 14.4%. In the past 60 days, the Zacks Consensus Estimate for TTEK’s fiscal 2024 earnings has increased 2.9%.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently has a Zacks Rank #2. It has a trailing four-quarter average earnings surprise of 10.4%. The Zacks Consensus Estimate for AIT’s fiscal 2024 earnings has increased 1.7% in the past 60 days.
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Reasons to Add Donaldson (DCI) Stock to Your Portfolio Now
Donaldson Company, Inc. (DCI - Free Report) is well poised for growth courtesy of strength across its businesses, strategic acquisitions, and focus on improving the product line and operational excellence.
Image Source: Zacks Investment Research
The company has a market capitalization of $8.7 billion. Over the past six months, it has gained 14.2% compared with the industry’s growth of 11.7%. DCI currently carries a Zacks Rank #2 (Buy)
Let’s delve into the factors that have been aiding the firm for a while now.
Business Strength: Donaldson has been benefiting from strong dust collection sales and strength in the industrial filtration solutions business. Strength in the company’s aftermarket business and recovery in Disk Drive market demand are expected to drive its performance in the quarters ahead. Increasing defense sales within the Aerospace and Defense business also bode well for the company. For fiscal 2024 (ending July 2024), management expects overall sales to increase 3-7% from the year-ago levels.
Acquisition Benefits: The company intends to strengthen and expand its businesses through buyouts. In June 2023, DCI acquired Univercells Technologies, thereby expanding its growing offering in the life sciences industry. Also, in February 2023, it acquired Isolere Bio. This buyout enables Donaldson to create leading separation and filtration solutions for genetic-based drugs.
Shareholder-Friendly Policies: Donaldson is committed to rewarding shareholders through dividend payouts and share repurchases. In the first six months of fiscal 2024 (ended January 2024), the company paid out dividends of $60.3 million and repurchased shares for $87.1 million. Also, in May 2023, it hiked its quarterly dividend rate by 8.7%. This apart, in November 2023, it announced a new repurchase program, authorizing to repurchase up to 12 million shares of its common stock.
Estimate Revisions: In the past 30 days, the Zacks Consensus Estimate for Donaldson’s fiscal 2024 earnings has trended up from $3.20 to $3.28 on five upward estimate revisions against none downward. The consensus estimate for fiscal 2025 (ending July 2025) earnings increased from $3.55 to $3.64 on four upward estimate revisions against none downward.
Other Stocks to Consider
Some other top-ranked companies from the same space are discussed below:
Atmus Filtration Technologies Inc. (ATMU - Free Report) currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
It delivered a trailing four-quarter average earnings surprise of 20.3%. In the past 60 days, the Zacks Consensus Estimate for Atmus Filtration’s 2024 earnings has increased 2%.
Tetra Tech, Inc. (TTEK - Free Report) currently carries a Zacks Rank #2. It delivered a trailing four-quarter average earnings surprise of 14.4%. In the past 60 days, the Zacks Consensus Estimate for TTEK’s fiscal 2024 earnings has increased 2.9%.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently has a Zacks Rank #2. It has a trailing four-quarter average earnings surprise of 10.4%. The Zacks Consensus Estimate for AIT’s fiscal 2024 earnings has increased 1.7% in the past 60 days.