Donaldson Co Inc

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DCI : NYSE : Industrial Goods
$46.91 -0.18 | -0.38%
Today's Range: 46.71 - 47.24
Avg. Daily Volume: 517000.0
05/23/17 - 4:02 PM ET

Financial Analysis


DONALDSON CO INC's gross profit margin for the second quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. Sales and net income have grown, and although the growth in revenues has outpaced the average competitor within the industry, the net income growth has not. DONALDSON CO INC has average liquidity. Currently, the Quick Ratio is 1.14 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has increased by 10.64% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q2 FY17 Q2 FY16
Net Sales ($mil)550.6517.2
EBITDA ($mil)87.873.2
EBIT ($mil)69.455.2
Net Income ($mil)46.538.0


Balance Sheet Q2 FY17 Q2 FY16
Cash & Equiv. ($mil)296.3231.9
Total Assets ($mil)1817.71788.9
Total Debt ($mil)574.9651.6
Equity ($mil)776.5701.8


Profitability Q2 FY17 Q2 FY16
Gross Profit Margin37.4736.68
EBITDA Margin15.9414.15
Operating Margin12.610.67
Sales Turnover1.251.25
Return on Assets12.0310.1
Return on Equity28.1725.74
Debt Q2 FY17 Q2 FY16
Current Ratio1.671.71
Debt/Capital0.430.48
Interest Expense4.85.5
Interest Coverage14.4610.04


Share Data Q2 FY17 Q2 FY16
Shares outstanding (mil)132.1132.93
Div / share0.180.17
EPS0.350.28
Book value / share5.885.28
Institutional Own % n/a n/a
Avg Daily Volume513895.0668263.0

Valuation


BUY. DONALDSON CO INC's P/E ratio indicates a premium compared to an average of 26.76 for the Machinery industry and a premium compared to the S&P 500 average of 25.02. For additional comparison, its price-to-book ratio of 7.81 indicates a significant premium versus the S&P 500 average of 3.00 and a significant premium versus the industry average of 4.82. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, DONALDSON CO INC proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
DCI 28.18 Peers 26.76   DCI 17.84 Peers 15.45

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

DCI is trading at a valuation on par with its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

DCI is trading at a premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
DCI 25.10 Peers 21.57   DCI 1.70 Peers 2.50

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

DCI is trading at a significant premium to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

DCI trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
DCI 7.81 Peers 4.82   DCI 23.48 Peers 23.25

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

DCI is trading at a significant premium to its peers.

 

Average. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

DCI is expected to keep pace with its peers on the basis of earnings growth.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
DCI 2.67 Peers 1.98   DCI 1.21 Peers 12.53

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

DCI is trading at a significant premium to its industry.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

DCI significantly trails its peers on the basis of sales growth

 

 

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