Here's Why You Should Hold on to Donaldson (DCI) Stock for Now
Donaldson Company, Inc. DCI is well-poised for growth, driven by a diversified business structure with exposure in various geographies, a strong product portfolio, solid demand and a focus on innovation despite supply-chain issues, raw material inflation and foreign currency woes. Increased levels of equipment utilization across the end markets and market share gains in less mature geographies are aiding its Aftermarket business. In the quarters ahead, the Aerospace and defense business are expected to perform well, supported by improved commercial aerospace market conditions.
Donaldson has been strengthening and expanding its businesses through asset additions for a while. Its Purilogics, LLC (June 2022) buyout strengthened DCI’s life sciences portfolio by leveraging Purilogics’ unique product offerings. The acquisition of Solaris Biotechnology (in November 2021) strengthened its presence across several end markets, including food and beverage, biopharma and other major life sciences. Also, DCI acquired Pearson Arnold Industrial Services in the same month.
DCI’s measures to reward its shareholders through dividend payments and share buybacks are encouraging. During fiscal 2022 (ended July 2022), Donaldson paid out dividends worth $110.1 million and repurchased shares worth $170.6 million. DCI also announced a hike of 4.5% in its quarterly dividend rate in May 2022.
In light of the above-mentioned positives, we believe, investors should hold on to the Donaldson stock for now, as is suggested by its current Zacks Rank #3 (Hold).
In the past three months, the stock has rallied 5% compared with the industry’s increase of 3.3%.
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Stocks to Consider
Some better-ranked companies from the Industrial Products sector are discussed below:
Applied Industrial Technologies, Inc. AIT presently has a Zacks Rank #1 (Strong Buy) and a trailing four-quarter earnings surprise of 22.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
AIT’s earnings estimates have increased 5.1% for fiscal 2023 (ending June 2023) in the past 60 days. Its shares have risen 18.1% in the past three months.
IDEX Corporation IEX presently has a Zacks Rank #2. IEX’s earnings surprise in the last four quarters was 4.6%, on average.
In the past 60 days, IDEX’s earnings estimates have increased 0.1% for 2022. The stock has rallied 11.7% in the past three months.
Eaton Corporation plc ETN presently has a Zacks Rank of 2. ETN’s earnings surprise in the last four quarters was 1.4%, on average.
In the past 60 days, Eaton’s earnings estimates have increased 0.1% for 2022. The stock has rallied 11.5% in the past three months.
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Eaton Corporation, PLC (ETN) : Free Stock Analysis Report
Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report
IDEX Corporation (IEX) : Free Stock Analysis Report
Donaldson Company, Inc. (DCI) : Free Stock Analysis Report
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