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How Does Donaldson Company Compare to Its Peers?

Gabriel Kane

Why Donaldson's Revenue and Income Fell in Fiscal 1Q16

(Continued from Prior Part)

Donaldson Company and its peers

In this article, we’ll compare Donaldson (DCI) with its peers and a few ETFs that invest in it:

  • The PE (price-to-earnings) ratios of Donaldson (DCI), Caterpillar (CAT), Cummins (CMI), and Clarcor (CLC) are 21.0x, 14.8x, 10.7x, and 18.2x, respectively, as of November 25, 2015.

  • The PBV (price-to-book value) ratios of Donaldson, Caterpillar, Cummins, and Clarcor are 5.5x, 2.7x, 2.3x, and 2.3x, respectively.
  • The price-to-sales ratios of Donaldson, Caterpillar, Cummins, and Clarcor are 1.8x, 0.83x, 0.91x, and 1.7x, respectively.

Thus, Donaldson Company has outperformed its peers based on PE, PBV, and price-to-sales ratios.

ETFs that invest in Donaldson Company

The Market Vectors Environmental Services ETF (EVX) invests 3.5% of its holdings in Donaldson. The ETF tracks a tiered, equal-weighted index of companies that stand to benefit from increased demand for waste management.

The PowerShares Cleantech Portfolio (PZD) invests 2.2% of its holdings in Donaldson. The ETF tracks a tiered, equal-weighted index of companies in the cleantech industry.

The First Trust Value Line Dividend Index Fund (FVD) invests 0.58% of its holdings in Donaldson. The ETF tracks an equal-weighted index of dividend-paying companies. The index excludes companies with less than $1 billion in market cap.

Comparing Donaldson and its ETFs

Now let’s compare Donaldson with the ETFs mentioned above:

  • The YTD (year-to-date) price movements of Donaldson, EVX, PZD, and FVD are -17.9%, -10.8%, 1.7%, and 2.4%, respectively.
  • The PE ratios of Donaldson, PZD, and FVD are 21.0x, 33.4x, and 19.9x, respectively.
  • The PBV ratios of Donaldson, EVX, PZD, and FVD are 5.5x, 2.1x, 2.8x, and 2.5x, respectively.

According to the above findings, these ETFs have outperformed Donaldson based on price movement. However, Donaldson is ahead of these ETFs based on PBV ratio.

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