Donaldson Co Inc's Dividend Analysis
Insight into Donaldson Co Inc's Upcoming Dividend and Financial Health
Donaldson Co Inc (NYSE:DCI) recently announced a dividend of $0.25 per share, payable on 2024-02-28, with the ex-dividend date set for 2024-02-09. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Donaldson Co Inc's dividend performance and assess its sustainability.
What Does Donaldson Co Inc Do?
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Donaldson is a leading manufacturer of filtration systems and replacement parts (including air filtration systems, liquid filtration systems, and dust, fume, and mist collectors). The company serves a diverse range of end markets, including construction, mining, agriculture, truck, and industrial. Its business is organized into three segments: mobile solutions, industrial solutions, and life sciences. Donaldson generated approximately $3.4 billion in revenue and $480 million in operating income in its fiscal 2023.
A Glimpse at Donaldson Co Inc's Dividend History
Donaldson Co Inc has maintained a consistent dividend payment record since 1985, with dividends currently distributed on a quarterly basis. As a testament to its commitment to shareholder returns, Donaldson Co Inc has increased its dividend each year since 1996, earning it the prestigious title of a dividend aristocrat. This designation is reserved for companies that have consistently raised their dividends for at least 25 years.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Donaldson Co Inc's Dividend Yield and Growth
As of today, Donaldson Co Inc currently has a 12-month trailing dividend yield of 1.48% and a 12-month forward dividend yield of 1.51%, indicating an expectation of increased dividend payments over the next 12 months. Over the past three years, Donaldson Co Inc's annual dividend growth rate was 3.80%, which extends to 4.90% per year over a five-year horizon, and a 6.70% annual growth rate over the past decade.
Based on Donaldson Co Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Donaldson Co Inc stock as of today is approximately 1.88%.
The Sustainability Question: Payout Ratio and Profitability
Assessing the sustainability of Donaldson Co Inc's dividend involves examining the dividend payout ratio, which stands at 0.32 as of 2023-10-31. This indicates that the company retains a substantial portion of its earnings, bolstering its capacity to fund growth and weather economic challenges. The company's strong profitability rank of 9 out of 10, coupled with a consistent track record of positive net income, underscores its robust financial health and augurs well for future dividend reliability.
Growth Metrics: The Future Outlook
Donaldson Co Inc's exemplary growth rank of 9 out of 10 signals a promising growth trajectory. Strong revenue per share growth of 11.30% annually, outpacing 63.29% of global competitors, is a testament to its solid revenue model. Moreover, the company's 3-year EPS growth rate of 15.00% annually and a 5-year EBITDA growth rate of 15.10%, both outperforming a majority of competitors, indicate a strong potential for sustained dividend payments.
Concluding Insights on Donaldson Co Inc's Dividends
In conclusion, Donaldson Co Inc's strong dividend history, coupled with its consistent growth in dividend payouts, paints a picture of a company committed to rewarding its shareholders. The prudent payout ratio, robust profitability, and favorable growth metrics further bolster confidence in the sustainability of its dividends. Investors considering adding dividend-paying stocks to their portfolios may find Donaldson Co Inc an attractive option, given its financial health and growth prospects. As value investors keen on informed decision-making, keeping an eye on such financially sound companies can be a strategic move.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
