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Here's Why You Should Hold Donaldson (DCI) in Your Portfolio
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Donaldson Company, Inc. (DCI - Free Report) has been benefiting from its diversified business structure with exposure in various end markets like construction, mining, aerospace, defense and food & beverage. Strength in the company’s industrial filtration solutions business driven by solid best collection and power generation sales have been aiding the Industrial Solutions segment. Increasing defense sales within the Aerospace and Defense business augur well for the segment.
The company remains focused on acquiring businesses to gain access to new customers, regions and product lines. Its acquisition of Univercells Technologies in June 2023 expanded its product offerings in the life sciences industry. Also, DCI acquired Isolere Bio in February 2023. The Isolere buyout enabled Donaldson to create leading separation and filtration solutions for emerging genetic-based drugs.
Donaldson remains committed to increasing shareholders’ value through dividend payment and share repurchases. Dividend payments totaled $30.2 million in the first three months of fiscal 2024 (ended Oct 31, 2023). The company bought back shares worth $53.3 million in the first three months of fiscal 2024. It hiked its quarterly dividend by 8.7% in May 2023. For fiscal 2024 (ending July 2024), DCI plans to buy back approximately 2% of its outstanding shares.
Image Source: Zacks Investment Research
In the past three months, the Zacks Rank #3 (Hold) company has gained 8.2% compared with the industry’s 9.6% growth.
However, softness in Donaldson’s Mobile Solutions segment due to weak end-market demand in China within the Off-Road business is concerning. The Life Sciences segment is also experiencing softness due to continued disk drive market weakness.
The escalating cost of goods sold has also been a major concern for the company. Its operating expenses in the first three months of fiscal 2024 rose 5% year over year due to increased hiring and acquisition-related expenses.
Stocks to Consider
Some better-ranked companies from the Industrial Products sector are discussed below.
PH delivered a trailing four-quarter average earnings surprise of 14.4%. In the past 60 days, the Zacks Consensus Estimate for its 2024 earnings has increased 2.7%.
Flowserve Corporation (FLS - Free Report) presently has a Zacks Rank of 2. FLS delivered a trailing four-quarter average earnings surprise of 27.3%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2023 earnings has remained steady.
Tetra Tech Inc. (TTEK - Free Report) presently has a Zacks Rank of 2. TTEK delivered a trailing four-quarter average earnings surprise of 14.4%. In the past 60 days, the Zacks Consensus Estimate for Tetra Tech’s 2024 earnings has increased 2.9%.
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Here's Why You Should Hold Donaldson (DCI) in Your Portfolio
Donaldson Company, Inc. (DCI - Free Report) has been benefiting from its diversified business structure with exposure in various end markets like construction, mining, aerospace, defense and food & beverage. Strength in the company’s industrial filtration solutions business driven by solid best collection and power generation sales have been aiding the Industrial Solutions segment. Increasing defense sales within the Aerospace and Defense business augur well for the segment.
The company remains focused on acquiring businesses to gain access to new customers, regions and product lines. Its acquisition of Univercells Technologies in June 2023 expanded its product offerings in the life sciences industry. Also, DCI acquired Isolere Bio in February 2023. The Isolere buyout enabled Donaldson to create leading separation and filtration solutions for emerging genetic-based drugs.
Donaldson remains committed to increasing shareholders’ value through dividend payment and share repurchases. Dividend payments totaled $30.2 million in the first three months of fiscal 2024 (ended Oct 31, 2023). The company bought back shares worth $53.3 million in the first three months of fiscal 2024.
It hiked its quarterly dividend by 8.7% in May 2023. For fiscal 2024 (ending July 2024), DCI plans to buy back approximately 2% of its outstanding shares.
Image Source: Zacks Investment Research
In the past three months, the Zacks Rank #3 (Hold) company has gained 8.2% compared with the industry’s 9.6% growth.
However, softness in Donaldson’s Mobile Solutions segment due to weak end-market demand in China within the Off-Road business is concerning. The Life Sciences segment is also experiencing softness due to continued disk drive market weakness.
The escalating cost of goods sold has also been a major concern for the company. Its operating expenses in the first three months of fiscal 2024 rose 5% year over year due to increased hiring and acquisition-related expenses.
Stocks to Consider
Some better-ranked companies from the Industrial Products sector are discussed below.
Parker-Hannifin Corporation (PH - Free Report) presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PH delivered a trailing four-quarter average earnings surprise of 14.4%. In the past 60 days, the Zacks Consensus Estimate for its 2024 earnings has increased 2.7%.
Flowserve Corporation (FLS - Free Report) presently has a Zacks Rank of 2. FLS delivered a trailing four-quarter average earnings surprise of 27.3%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2023 earnings has remained steady.
Tetra Tech Inc. (TTEK - Free Report) presently has a Zacks Rank of 2. TTEK delivered a trailing four-quarter average earnings surprise of 14.4%. In the past 60 days, the Zacks Consensus Estimate for Tetra Tech’s 2024 earnings has increased 2.9%.