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Donaldson Company, Inc. Posted By : admin
Posted On : Friday, December 12, 2014
Company Name : Donaldson Company, Inc. Investment Range : Long
Ticker : NYSE:DCI M.Cap.Range : Large-cap
Country : US Stock Price : 37.90
Description :        

Description of Business

DCI is a leading manufacturer of filtration systems and replacement parts. Through its Engine Products segment, DCI sells to original equipment manufacturers in the truck, construction, mining, agriculture, aerospace and defense markets, and to OEM dealer networks, independent distributors, private label accounts and large equipment fleets in the aftermarket. DCI‘s Industrial Products segment sells to various industrial end-users, OEMs of gas-fired turbines, and other special applications such as computer hard disk drives.

Positives

  • The company has long history of constant dividend payments and the company also increased dividend almost each year
  • They also made regular share buybacks
  • Stable year on year financial performance with net profit margin maintained at around 10%
  • Very diversified product base, replacement demand to provide support
  • Company have grown in 22 out of last 25 years. Company aims to grow 9-10% going forward

Negatives

  • Slightly cyclical in nature

Customers

No customer accounts for 10% of revenue.

Competitors

Cummins, MFRI, Pall Corporation

Summary

The company has diversified business across geographies and also has replacement demand to provide downside protection. Current valuations does not suggest its cheap (10-12% grower available at 20 PE. But the company has good fundamentals and visibility)

 
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