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Here's Why Investing in Donaldson (DCI) Stock Makes Sense Now
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Donaldson Company, Inc. (DCI - Free Report) is gaining from its Industrial Solutions segment and accretive acquisitions despite increasing operating expenses.
Let’s delve into the factors that make this current Zacks Rank #2 (Buy) company a smart investment choice at the moment.
Business Strength: A diversified business structure with exposure in various geographies and end markets like construction, mining, aerospace, defense, and food & beverage is a boon for the company. The Industrial Solutions segment is supported by continued strength in dust collection and power generation verticals within the industrial filtration solutions business. Increasing defense sales within the Aerospace and Defense business are also aiding the segment.
The Mobile segment is benefiting from strength in aftermarket business while recovery in Disk Drive demand is boosting the Life Sciences segment. For fiscal 2024 (ending August 2024), the company expects Industrial Solutions sales to be up 3-7% from a year ago, driven by sales growth in industrial filtration solutions. It expects its Life Sciences segment’s sales to increase approximately 20% while Mobile Solutions’ sales are anticipated to increase 1-5% from the prior-year levels.
Expansion Initiatives: The company solidified its product portfolio and leveraged business opportunities by adding assets. In June 2023, the company acquired Univercells Technologies, thus expanding its growing offering in the life sciences industry. Univercells will be added to Donaldson’s Life Sciences segment. The company acquired Isolere Bio in February 2023. The Isolere buyout enables Donaldson to create leading separation and filtration solutions for emerging genetic-based drugs and Isolere’s revenues are reported within the Donaldson Life Sciences segment.
Rewards to Shareholders: Donaldson is committed to rewarding its shareholders handsomely through dividend payments and share buybacks. Dividend payments totaled $60.3 million in the first six months of fiscal 2024 (ended January 2024) and $114.4 million in fiscal 2023 (ended July 2023). The company bought back shares worth $87.1 million in the first six months of fiscal 2024 and $141.8 million in fiscal 2023. It is worth noting that the company’s quarterly dividend was hiked 8.7% in May 2023. Donaldson has raised its dividend for 27 consecutive years.
Northward Estimate Revision: The Zacks Consensus Estimate for DCI’s fiscal 2024 earnings has increased 2.5% in the past 60 days.
Price Performance: Shares of Donaldson have gained 20.8% in the past year, outperforming the industry’s 11.1% increase
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked companies from the Industrial Products sector are discussed below:
Image: Bigstock
Here's Why Investing in Donaldson (DCI) Stock Makes Sense Now
Donaldson Company, Inc. (DCI - Free Report) is gaining from its Industrial Solutions segment and accretive acquisitions despite increasing operating expenses.
Let’s delve into the factors that make this current Zacks Rank #2 (Buy) company a smart investment choice at the moment.
Business Strength: A diversified business structure with exposure in various geographies and end markets like construction, mining, aerospace, defense, and food & beverage is a boon for the company. The Industrial Solutions segment is supported by continued strength in dust collection and power generation verticals within the industrial filtration solutions business. Increasing defense sales within the Aerospace and Defense business are also aiding the segment.
The Mobile segment is benefiting from strength in aftermarket business while recovery in Disk Drive demand is boosting the Life Sciences segment. For fiscal 2024 (ending August 2024), the company expects Industrial Solutions sales to be up 3-7% from a year ago, driven by sales growth in industrial filtration solutions. It expects its Life Sciences segment’s sales to increase approximately 20% while Mobile Solutions’ sales are anticipated to increase 1-5% from the prior-year levels.
Expansion Initiatives: The company solidified its product portfolio and leveraged business opportunities by adding assets. In June 2023, the company acquired Univercells Technologies, thus expanding its growing offering in the life sciences industry. Univercells will be added to Donaldson’s Life Sciences segment. The company acquired Isolere Bio in February 2023. The Isolere buyout enables Donaldson to create leading separation and filtration solutions for emerging genetic-based drugs and Isolere’s revenues are reported within the Donaldson Life Sciences segment.
Rewards to Shareholders: Donaldson is committed to rewarding its shareholders handsomely through dividend payments and share buybacks. Dividend payments totaled $60.3 million in the first six months of fiscal 2024 (ended January 2024) and $114.4 million in fiscal 2023 (ended July 2023). The company bought back shares worth $87.1 million in the first six months of fiscal 2024 and $141.8 million in fiscal 2023. It is worth noting that the company’s quarterly dividend was hiked 8.7% in May 2023. Donaldson has raised its dividend for 27 consecutive years.
Northward Estimate Revision: The Zacks Consensus Estimate for DCI’s fiscal 2024 earnings has increased 2.5% in the past 60 days.
Price Performance: Shares of Donaldson have gained 20.8% in the past year, outperforming the industry’s 11.1% increase
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked companies from the Industrial Products sector are discussed below:
Applied Industrial Technologies, Inc. (AIT - Free Report) presently sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter average earnings surprise of 10.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AIT’s fiscal 2024 earnings has increased 2.5% in the past 60 days. The stock has gained 48.8% in the past year.
Caterpillar Inc. (CAT - Free Report) presently carries a Zacks Rank of 2 and a trailing four-quarter earnings surprise of 19.7%, on average.
CAT’s earnings estimates have increased 3.5% for 2024 in the past 60 days. Shares of Caterpillar have risen 73.3% in the past year.
A. O. Smith Corporation (AOS - Free Report) presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 12%.
The Zacks Consensus Estimate for AOS’ 2024 earnings increased 0.5% in the past 60 days. Shares of A. O. Smith have soared 32.8% in the past year.