Donaldson Co
manufactures filtration systems and replacements parts including air and liquid
filters, exhaust and emission control products, in-plant air cleaning systems,
air purification systems, intake systems and specialized filters. The company has grown profits and dividends
at a 13-16% pace over the last 10 years earning a 19-25% return on equity. As with most industrial equipment suppliers,
there is some cyclicality to earnings; however, the company should attain above
average rate of earnings growth over the long term as a result of:
(1) expansion
into emerging markets,
(2) the
introduction of new products through technological innovation,
(3) improved
productivity coming from a comprehensive cost rationalization program.
Negatives:
(1)
faltering demand in several of its end markets,
(2) rising raw
material costs.
Statistical Summary
Stock Dividend Payout # Increases
Yield Growth Rate Ratio
Since 2004
Ind Ave 1.4 11 24 NA
Debt/ EPS Down Net Value Line
Equity ROE Since 2004 Margin
Rating
Ind Ave 27 17 NA 9 NA
Chart
Note:
DCI stock made good progress off its March 2009 low, quickly surpassing the downtrend
off its May 2008 high (straight red line) and the November 2008 trading high
(green line). Long term, the stock is in
an uptrend (blue lines). Intermediate
term, it is in an uptrend (purple lines); although, it is close to challenging
the lower boundary of that trend. The
wiggly red line is the 50 day moving average.
The Aggressive Growth Portfolio owns an 85% position in DCI. The upper boundary of its Buy Value Range is
$39; the lower boundary of its Sell Half Range is $64.
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