Yahoo Finance Donaldson Co Inc's Dividend Analysis
Exploring the Sustainability and Growth of Dividends
Donaldson Co Inc (NYSE:DCI) recently announced a dividend of $0.27 per share, payable on 2024-06-28, with the ex-dividend date set for 2024-06-17. 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. Dividends are currently distributed on a quarterly basis. Donaldson Co Inc has increased its dividend each year since 1996. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 28 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 1.39% and a 12-month forward dividend yield of 1.51%. This suggests 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%. Extended to a five-year horizon, this rate increased to 4.90% per year. And over the past decade, Donaldson Co Inc's annual dividends per share growth rate stands at 6.70%.
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 1.77%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2024-04-30, Donaldson Co Inc's dividend payout ratio is 0.31.
Donaldson Co Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Donaldson Co Inc's profitability 9 out of 10 as of 2024-04-30, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Donaldson Co Inc's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Donaldson Co Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Donaldson Co Inc's revenue has increased by approximately 11.30% per year on average, a rate that outperforms approximately 58.48% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Donaldson Co Inc's earnings increased by approximately 15.00% per year on average, a rate that outperforms approximately 53.39% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 15.10%, which outperforms approximately 65.31% of global competitors.
Conclusion
With a robust history of consistent and growing dividends, coupled with strong payout ratios and profitability metrics, Donaldson Co Inc presents a compelling case for dividend investors. The company's strategic focus on growth and sustainability further enhances its appeal in the competitive industrial sector. As Donaldson Co Inc continues to navigate through market challenges and opportunities, it remains a noteworthy candidate for those seeking stable dividend income with growth potential.
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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.
