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Donaldson Rewards Shareholders With 11.1% Dividend Increase

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Key Takeaways

  • Donaldson raised its quarterly dividend by 11.1% to 30 cents per share, effective June 30, 2025.
  • This marks Donaldson's 29th consecutive annual dividend hike and 69 years of uninterrupted payouts.
  • Donaldson's $81.6 million in buybacks reflects strong cash flow and commitment to investors.

In a shareholder-friendly move, Donaldson Company, Inc. (DCI - Free Report) has announced a hike in its dividend payout. The company increased its quarterly dividend by 11.1% to 30 cents per share (annually: $1.20). The new dividend will be paid out on June 30, 2025, to shareholders of record as of June 16.

The move underscores DCI’s sound financial health as it utilizes free cash flow to enhance its shareholders’ returns. This marks Donaldson’s 29th consecutive year of annual dividend increase. It has been paying dividends every quarter for the last 69 years. Prior to this, it had hiked its dividend by 8% to 27 cents per share in May 2024.

Strong cash flows allow Donaldson to effectively deploy capital for making acquisitions, repurchasing shares and paying out dividends. Dividend payments totaled $64.6 million in the first six months of fiscal 2025 (ended January 2025) and $122.8 million in fiscal 2024 (ended July 2024). The company bought back shares worth $81.6 million in the first six months of fiscal 2025 and $162.7 million in fiscal 2024. We believe such disbursements highlight the company’s operational strength and commitment to enhancing shareholders’ wealth.

DCI’s Zacks Rank & Price Performance

Donaldson is benefiting from higher volume in the aftermarket business, driven by positive market trends and the impact of expanded market share within the Mobile Solutions segment. Persistent strength in the aerospace and defense business is aiding DCI’s Industrial Solutions segment.

In the year-to-date period, this Zacks Rank #3 (Hold) company’s shares have gained 3.3% against the industry’s 6.4% decline.

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However, DCI has been dealing with the adverse impacts of high selling, general and administrative expenses. Given the company’s diverse presence, forex woes are concerning as well.

Stocks to Consider

Some better-ranked companies are discussed below:

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CCK delivered a trailing four-quarter average earnings surprise of 16.3%. In the past 60 days, the Zacks Consensus Estimate for Crown Holdings’ 2025 earnings has increased 3.8%.

Broadwind, Inc. (BWEN - Free Report) presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 61.1%.

In the past 60 days, the consensus estimate for BWEN’s 2025 earnings has increased 14.3%.

Tetra Tech, Inc. (TTEK - Free Report) presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 3.8%.

The Zacks Consensus Estimate for TTEK’s fiscal 2025 earnings has increased 7.3% in the past 60 days.

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