Donaldson Company, Inc. (DCI) AI Stock Analysis

Donaldson Company, Inc. is a global manufacturer and distributor of filtration systems and replacement parts, operating through two segments: Engine Products and Industrial Products. The Engine Products segment manufactures replacement filters, complete air and liquid filtration systems for fuel, lube, and hydraulic applications, as well as exhaust systems and monitoring solutions. It serves original equipment manufacturers (OEMs) in construction, mining, agriculture, aerospace, defense, and transportation, alongside independent distributors and fleet operators. The Industrial Products segment provides dust, fume, and mist collectors, compressed air purification systems, and gas and liquid filtration systems for industrial, food, and beverage processes, as well as gas turbine solutions.

Between FY2022 and FY2026, Donaldson's revenue increased from $3.31B to $3.89B, reflecting a 5-year revenue CAGR of 6.4%. In FY2026, revenue rose 5.3% year-over-year, while net income increased to $453.8M with a net margin of 11.7%, and diluted EPS reached $3.98. Operating margin was 15.4% in FY2026, up from 13.4% in FY2022. For the trailing twelve months, operating margin stands at 17.0%, and profit margin is 11.7%. In the latest quarter ended July 31, 2026, quarterly revenue grew 8.0% year-over-year, while quarterly earnings expanded by 14.0%.

As of July 31, 2026, Donaldson reported $250.4M in cash and short-term investments alongside total debt of $1.38B, resulting in net debt of $1.13B. Total assets stood at $3.99B against shareholders' equity of $1.76B, yielding a debt-to-equity ratio of 0.78 and a current ratio of 2.08. In FY2026, the company generated $493.7M in operating cash flow and invested $67.4M in capital expenditures, leaving free cash flow of $426.3M. Capital allocation in FY2026 included $111.2M spent on share buybacks and $141.2M paid in dividends, contributing to a 5-year share count reduction of 6.7%.

At $87.97 per share, Donaldson holds a market capitalization of $10.19B and an enterprise value of $11.13B. The stock trades at a trailing P/E of 22.8x, compared to 24.8x for the median of its US-listed Industrials peers. Its forward P/E of 19.9x trades at a premium to the peer median of 17.2x. DCI carries an EV/EBITDA of 15.3x versus the peer median of 13.9x, and a price-to-sales ratio of 2.6x against the peer median of 1.5x. Over the past year, DCI gained 8.3% compared to a 16.8% return for the S&P 500 (SPY), and its 5-year return of 61.6% trailed the index's 83.0% gain.

Donaldson pays a quarterly dividend with an annualized forward payout of $1.24 per share, resulting in a dividend yield of 1.41%. The company has paid dividends for 40 consecutive years and delivered a 5-year annualized dividend growth rate of 6.9%. The payout ratio is 31.2%, and the last ex-dividend date was August 17, 2026.

Wall Street coverage includes 2 Strong Buy, 5 Hold, and 1 Sell ratings among 8 analysts. The mean price target is $100.40, representing an upside of 14.1% over the last close of $87.97. For the fiscal year ending July 31, 2027, consensus estimates project EPS of $4.33 (growth of 8.8%) on revenue of $4.19B. For the following fiscal year, analysts expect EPS of $4.86 on revenue of $4.40B. The company beat EPS estimates in 3 of the last 4 quarters, with its next earnings report scheduled for December 3, 2026.

This page is an AI-written research summary of Donaldson Company, Inc. (DCI). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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