Donaldson Company, Inc. (DCI) Stock Analysis

Why this analysis is different

• A sector-relative MoonshotScore — five pillars (business quality, financial safety, valuation, growth durability, momentum) re-ranked nightly against the full universe of US-listed common stocks.
• An AI Council read across up to eight perspectives — value, macro, quantitative, and momentum lenses — that shows where they disagree instead of averaging the tension away.
• Figures come straight from FMP and Yahoo Finance filings data. The AI writes the narrative around the numbers — it never edits the numbers.

Donaldson Company, Inc. (DCI) Industrial Operations Profile

Donaldson Company, Inc. is a global leader in filtration systems and replacement parts, operating through Engine Products and Industrial Products segments. The company serves diverse sectors, including construction, agriculture, and transportation, providing air and liquid filtration solutions, exhaust systems, and specialized filtration products for industrial applications, maintaining a strong presence in both OEM and aftermarket channels.

What Is the Investment Thesis for DCI?

With a market capitalization of $10.2B and a P/E ratio of 22.49, the company demonstrates stability and profitability. A profit margin of 10.1% and a gross margin of 34.4% reflect efficient operations. Growth catalysts include expanding its presence in emerging markets and developing advanced filtration technologies. However, potential risks include fluctuations in raw material costs and increased competition from alternative filtration solutions. The company's beta of 1.06 indicates market correlation, while a dividend yield of 1.40% offers a steady income stream for investors.

Based on FMP financials and quantitative analysis

DCI Key Highlights

Market Cap of $10.2B indicates substantial investor confidence and company size.

• P/E Ratio of 22.49 reflects the valuation relative to earnings.
• Profit Margin of 10.1% demonstrates the company's ability to generate profit from revenue.
• Gross Margin of 34.4% shows the efficiency in producing goods and services.
• Dividend Yield of 1.40% provides a return to investors through dividend payments.

Who Are DCI's Competitors?

DCI is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance This table mixes two scoring engines — compare a number only with others carrying the same tag.

What Are DCI's Key Strengths?

Diverse product portfolio across Engine Products and Industrial Products.

• Global presence with established distribution networks.
• Strong relationships with OEMs and distributors.
• Consistent financial performance and profitability.

What Are DCI's Weaknesses?

Dependence on cyclical industries, such as construction and mining.

• Exposure to fluctuations in raw material costs.
• Potential for increased competition from alternative filtration technologies.
• Limited brand recognition among end-users compared to some competitors.

What Could Drive DCI Stock Higher?

Potential infrastructure spending in developing nations could drive demand for Donaldson's filtration solutions.

• Increasing environmental regulations are driving demand for advanced filtration technologies.
• Expansion of e-commerce platform to enhance customer engagement and drive aftermarket sales.
• Strategic acquisitions to expand product portfolio and geographic reach.

What Are the Key Risks for DCI?

Insider selling — insiders were net sellers of roughly $5.0M recently.

• Economic downturns could reduce industrial production and capital spending.
• Fluctuations in raw material costs could impact profitability.
• Increased competition from low-cost manufacturers.
• Disruptions in the supply chain due to geopolitical events or natural disasters.
• Changes in environmental regulations requiring more stringent filtration standards.

What Are the Growth Opportunities for DCI?

• Expansion in Emerging Markets: Donaldson has the opportunity to expand its presence in emerging markets, particularly in Asia-Pacific and Latin America, where industrialization and infrastructure development are driving demand for filtration systems. These regions present significant growth potential for both Engine Products and Industrial Products segments. Successful penetration into these markets could lead to a substantial increase in revenue over the next 3-5 years.
• Development of Advanced Filtration Technologies: Investing in R&D to develop advanced filtration technologies, such as nanofiber and membrane-based solutions, can provide a competitive edge. These technologies offer improved efficiency and performance, catering to the growing demand for high-performance filtration systems in industries like semiconductor manufacturing and pharmaceuticals. The timeline for commercializing these technologies is estimated at 2-4 years.
• Strategic Acquisitions: Donaldson can pursue strategic acquisitions to expand its product portfolio and geographic reach. Acquiring companies with complementary technologies or market access can accelerate growth and enhance competitiveness. Potential acquisition targets could include companies specializing in niche filtration applications or those with a strong presence in specific geographic regions. These acquisitions could be integrated within the next 1-3 years.
• Increased Focus on Aftermarket Sales: The aftermarket for replacement filters and parts represents a significant revenue stream. Donaldson can strengthen its aftermarket presence by expanding its distribution network, offering value-added services, and developing customer loyalty programs. This strategy can generate recurring revenue and improve customer retention. The impact of this strategy is expected to be seen within the next 1-2 years.
• Enhancing Digital Capabilities: Investing in digital technologies, such as e-commerce platforms and data analytics, can improve customer engagement and operational efficiency. An e-commerce platform can provide customers with easy access to Donaldson's products and services, while data analytics can optimize inventory management and predict customer demand. These digital enhancements can be implemented over the next 1-2 years.

What Are DCI's Competitive Advantages?

• Established brand reputation for quality and reliability.
• Extensive product portfolio catering to diverse applications.
• Global distribution network providing broad market access.
• Strong relationships with OEMs and distributors.
• Proprietary filtration technologies and intellectual property.

What Does DCI Do?

Founded in 1915 and headquartered in Bloomington, Minnesota, Donaldson Company, Inc. has evolved into a global manufacturer of filtration systems and replacement parts. The company operates through two primary segments: Engine Products and Industrial Products. The Engine Products segment offers a range of filtration solutions, including air and liquid filtration systems for fuel, lube, and hydraulic applications, as well as exhaust and emissions systems. These products are sold to original equipment manufacturers (OEMs) in sectors such as construction, mining, agriculture, aerospace, defense, and transportation. Donaldson also serves independent distributors, OEM dealer networks, private label accounts, and large fleets within this segment. The Industrial Products segment provides dust, fume, and mist collectors, compressed air purification systems, and gas and liquid filtration solutions for food, beverage, and industrial processes. This segment also offers air filtration systems for gas turbines and specialized filtration systems for applications like hard disk drives and semi-conductor manufacturing. The company's commitment to innovation and quality has solidified its position as a key player in the filtration industry, serving a broad range of customers worldwide.

What Products and Services Does DCI Offer?

• Manufactures and sells air filtration systems.
• Produces liquid filtration systems for fuel, lube, and hydraulic applications.
• Offers exhaust and emissions systems and sensors.
• Provides dust, fume, and mist collectors.
• Develops compressed air purification systems.
• Creates gas and liquid filtration for food, beverage, and industrial processes.
• Specializes in polytetrafluoroethylene membrane-based products.
• Offers specialized air and gas filtration systems for hard disk drives and semi-conductor manufacturing.

How Does DCI Make Money?

• Manufactures filtration systems and replacement parts.
• Sells products to OEMs, distributors, and end-users.
• Operates through Engine Products and Industrial Products segments.
• Generates revenue from both new equipment sales and aftermarket parts.

What Industry Does DCI Operate In?

Donaldson Company, Inc. operates within the industrial machinery sector, which is characterized by steady growth driven by infrastructure development and manufacturing expansion. The filtration market is highly competitive, with companies like Generac Holdings Inc. and Regal Rexnord Corporation vying for market share. Trends include increasing demand for energy-efficient and environmentally friendly filtration solutions. Donaldson's focus on innovation and diverse product offerings positions it well to capitalize on these trends and maintain its competitive edge.

Who Are DCI's Key Customers?

• Original Equipment Manufacturers (OEMs) in construction, mining, agriculture, aerospace, defense, and transportation.
• Independent distributors and OEM dealer networks.
• Private label accounts and large fleets.
• Dealers and distributors of gas-fired turbines.
• End-users requiring air filtration solutions and replacement filters.

Over the past six months, Donaldson Company, Inc. insiders filed 33 SEC Form 4 transactions — 16 sales and 17 purchases. On net that is roughly 56K shares disposed (about $5.0M), a signal worth weighing alongside the fundamentals.

Donaldson Company, Inc. has beaten Wall Street's EPS estimate in 4 of its last 8 reported quarters — more hits than misses.

Donaldson Company, Inc.'s Piotroski F-Score is 7/9, a 9-point checklist of profitability, leverage and efficiency — signaling solid underlying fundamentals. Its Altman Z-Score of 4.56 places it in the safe zone, indicating low near-term bankruptcy risk.

Return on equity for Donaldson Company, Inc. stands at 28.1%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is 14.2%, showing how much profit it generates from its asset base. DCI trades at a trailing price-to-earnings ratio of 22.49, below the Industrials sector average of ~28.00x. Its free cash flow yield is 3.7%, a gauge of the cash the business throws off relative to its market value. A current ratio of 2.35 indicates the company holds enough short-term assets to cover its near-term obligations. Its earnings yield is 4.2%, the inverse of the P/E and a quick read on earnings relative to price.

Donaldson Company, Inc. (DCI) Valuation Context

Valued at $10.2B, DCI is classified as a large-cap stock. Analyst price targets span from $91.00 to $105.00, with a consensus of $97.00. At the current price of $88.18, that implies approximately 10% upside potential. Relative to its peer group, DCI's quantitative score of 77/100 is above the peer average of 66/100.

DCI Revenue & Earnings Trend

In Q4 FY2026, DCI generated $1.06B in top-line revenue, marking a sequential increase of 6.4%. The company recorded net income of $129.3M, with diluted EPS of $1.10. Revenue has increased across the last three reported quarters, suggesting sustained momentum for this large-cap Industrials company. Across the four most recent quarters, DCI averaged $0.96 in diluted EPS.

Company Profile

Donaldson Company, Inc. operates in the Industrial - Machinery industry within the Industrials sector. It is headquartered in Bloomington, US. The company is led by CEO Richard Lewis. DCI has traded publicly since 1980.

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Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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