Core Points - Donaldson Company, Inc. held its annual meeting of stockholders, with preliminary voting results indicating strong support from stockholders for key proposals [1] - Stockholders approved the election of four directors, including new director Dan Shine [1] - The company's executive compensation practices received approval from the majority of stockholders [1] - PricewaterhouseCoopers was ratified as Donaldson's independent public accountant [1] - Will Oberton, the former lead independent director, retired from the company [1]

Core Viewpoint - Generating cash is crucial for businesses, but effective allocation of cash flow is essential for long-term success. Some companies may produce significant cash but fail to utilize it effectively, leading to missed opportunities. StockStory identifies companies that reinvest wisely and highlights one strong investment opportunity alongside two companies facing challenges. Group 1: Companies to Sell - Kraft Heinz (KHC) has a trailing 12-month free cash flow margin of 14.4% and is currently trading at $23.90 per share, with a forward P/E ratio of 9.7x [2][4] - Donaldson (DCI) has a trailing 12-month free cash flow margin of 9.3% and is priced at $85.90, reflecting a forward P/E ratio of 21.5x [5][7] Group 2: Concerns for Kraft Heinz (KHC) - The company has struggled with falling unit sales over the past two years, relying on price increases [9] - Operating expenses have increased relative to revenue, resulting in a 34.6 percentage point decline in operating margin [9] - A return on capital of only 1.2% indicates management's challenges in finding profitable growth opportunities [9] Group 3: Concerns for Donaldson (DCI) - The absence of organic revenue growth over the past two years suggests a reliance on acquisitions for expansion [10] - Estimated sales growth of 3.2% for the next 12 months indicates weaker demand [10] - A decline of 2.8 percentage points in free cash flow margin over the last five years reflects increased investments to maintain market position [10] Group 4: Company to Buy - Construction Partners (ROAD) has a trailing 12-month free cash flow margin of 6.9% and is positioned for growth [8] - Projected revenue growth of 33.2% over the next 12 months suggests an acceleration in demand [11] - The company has demonstrated strong profitability with an annual earnings per share growth of 70.6%, outpacing revenue gains [11] - Free cash flow margin has increased by 5.1 percentage points over the last five years, providing more resources for investment [11]

Company Overview - Donaldson is a Minneapolis-based global manufacturer specializing in filtration systems and replacement parts, with a notable presence in the Life Sciences sector [1]. - The company has approximately 115 million shares outstanding, with an equity market capitalization of around $10 billion and a total enterprise value of about $10.4 billion [1]. Financial Reporting - The company recently completed its first quarter, with results to be reported at the end of the month [2]. - The fiscal year for the company runs from August 1 to July 31, meaning the remarks made will reflect the close of the previous fiscal year [2]. Corporate Strategy - The company emphasizes its strategy as being defined by choices, with a focus on becoming a technology leader [3].

Summary of Donaldson Company Conference Call Company Overview - **Company Name**: Donaldson Company, Inc. - **Ticker**: DCI - **Location**: Minneapolis, Minnesota - **Industry**: Filtration systems and replacement parts - **Market Capitalization**: Approximately $10 billion - **Total Enterprise Value**: Approximately $10.4 billion - **Shares Outstanding**: About 115 million shares - **Current Share Price**: Around $85 Core Points and Arguments - **Strategic Focus**: The company aims to be a technology leader in filtration, maintain a global presence, and foster deep customer relationships [3][4][5] - **Business Model**: The company operates on a "razor-and-blades" model, with 68% of products being replacement parts and 32% being first-fit or capital expenditure-based parts [5][8] - **Growth Performance**: Donaldson has achieved record revenues and earnings per share (EPS) for four consecutive years, with guidance for $3.8 billion in revenue and a record operating margin of 16.4% for the current fiscal year [7][8] - **Dividend Policy**: The company has increased its dividend for 30 consecutive years, reflecting its commitment to returning value to shareholders [8][11] Industry Dynamics - **Market Segmentation**: The company operates in three segments: mobile solutions, industrial solutions, and life sciences, all of which present growth opportunities [9][10] - **Aftermarket Demand**: The aftermarket segment is expected to drive growth, especially as original equipment (OE) markets recover from downturns [17][18] - **Life Sciences Segment**: The life sciences segment has faced delays in product launches but remains a focus for future growth and acquisitions [10][15][25] Financial Health and M&A Strategy - **Cash Flow and Debt Management**: The company maintains a strong balance sheet with a net debt-to-EBITDA ratio of 0.7 and has $700 million available for investments [12][35] - **M&A Focus**: Donaldson is actively pursuing M&A opportunities across its segments, particularly in mobile solutions and industrial applications, while also considering life sciences [16][36] Operational Insights - **Supply Chain Resilience**: The company has improved its operational efficiency post-COVID, with reduced lead times and better customer service [9][33] - **Manufacturing Strategy**: Donaldson is shutting down underperforming plants in California to improve cost structures and is relocating operations to more favorable locations [34][37] Additional Considerations - **Technological Advancements**: The company is leveraging telematics and AI to enhance customer relationships and aftermarket opportunities [27][28][32] - **Market Recovery Expectations**: The company anticipates a rebound in the construction and mining sectors, which will positively impact its OE business [17][19] This summary encapsulates the key points discussed during the conference call, highlighting Donaldson Company's strategic direction, financial performance, and market outlook.

Core Insights - Donaldson Company, Inc. is a leading provider of innovative filtration products and solutions [1] - Tod Carpenter, the chairman, president, and CEO, will present at the Gabelli Funds 49th Annual Automotive Aftermarket Symposium on November 3rd [1] - The presentation is scheduled to begin at 3:00 p.m. PDT and will be available via live webcast [1] Company Information - Donaldson Company, Inc. is listed on the NYSE under the ticker DCI [1] - The company specializes in filtration products and solutions, indicating a focus on innovation within the industry [1] Event Details - The presentation at the Gabelli Funds 49th Annual Automotive Aftermarket Symposium highlights the company's engagement with industry stakeholders [1] - The webcast can be accessed through the "Events & Presentations" section of Donaldson's Investor Relations website [1]

Group 1 - Donaldson Company, Inc. (NYSE:DCI) is recognized as one of the 11 Best Value Dividend Stocks to buy currently [1] - The company is a significant producer of filtration systems for industrial, mobile, and life sciences applications, focusing on contaminant removal from air, liquids, and gases [2] - Donaldson operates through three main divisions: Mobile Solutions, Industrial Solutions, and Life Sciences, with a recent emphasis on market expansion and proprietary technology advancements [3] Group 2 - Donaldson has a strong dividend history, rewarding shareholders with increasing dividends for 29 consecutive years, currently offering a quarterly dividend of $0.30 per share and a dividend yield of 1.48% as of September 26 [4]

Core Viewpoint - Donaldson (DCI) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system reflects changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Rising earnings estimates for Donaldson suggest an improvement in the company's underlying business, likely leading to increased stock prices [5][10]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7][9]. - Only the top 20% of Zacks-covered stocks receive a "Strong Buy" or "Buy" rating, indicating superior earnings estimate revisions [10]. Recent Earnings Estimate Revisions - Donaldson is expected to earn $4.02 per share for the fiscal year ending July 2026, with no year-over-year change, but the Zacks Consensus Estimate has increased by 4% over the past three months [8].

Core Insights - Donaldson Company, Inc. (DCI) is experiencing growth across all segments, with acquired assets expected to enhance performance in upcoming quarters [1][3] - DCI holds a Zacks Rank 2 (Buy) and has outperformed the industry with a 9.9% gain over the past year, while the industry declined by 6.8% [1][6] Business Strength - The Mobile Solutions segment is benefiting from increased aftermarket business volume and recovery in agriculture markets [3][6] - The Industrial Solutions segment is supported by demand for dust collection equipment in the U.S. and Europe, as well as growth in the aerospace and defense sectors [4][6] - The Life Sciences segment is boosted by rising demand for disk drives and food & beverage products in the Asia Pacific region [4] Expansion Efforts - DCI has focused on acquisitions for business expansion, including a 49% stake in Medica S.p.A. in August 2024, enhancing its filtration technology and market reach [5][6] - The acquisition of Univercells Technologies in June 2023 further strengthens DCI's position in the life sciences industry [5][6] Rewards to Shareholders - DCI is committed to returning value to shareholders, having paid $333.6 million in dividends and repurchased $162.7 million in shares in fiscal 2025 [6][7] - The company increased its quarterly dividend by 11.1% in May 2025 and has raised dividends for 29 consecutive years [7] Northbound Estimate Revision - The Zacks Consensus Estimate for DCI's fiscal 2026 and fiscal 2027 earnings has been revised upward by 3.1% and 2.1%, respectively, in the past 60 days [7]

A month has gone by since the last earnings report for Donaldson (DCI) . Shares have lost about 0.1% in that time frame, underperforming the S&P 500.But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Donaldson due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Donaldson Company, Inc. before we dive into how investors and analysts have react ...

PART I [Business Overview](index=4&type=section&id=Item%201.%20Business) Donaldson is a global leader in technology-led filtration products and solutions, operating across Mobile, Industrial, and Life Sciences segments with strategic priorities for profitable growth - Donaldson Company, Inc., founded in 1915, is a global leader in technology-led filtration products and solutions, operating in over 150 locations across six continents, including **77 manufacturing and/or distribution centers**[10](index=10&type=chunk) Fiscal Year 2025 Revenue by Region | Region | Share of Fiscal Year 2025 Revenue | | :--------------- | :-------------------------------- | | U.S. and Canada | 44.2% | | EMEA | 27.8% | | APAC | 17.2% | | LATAM | 10.8% | - The Company's three primary strategic priorities are to Extend Market Access, Expand Technologies and Solutions, and Pursue Strategic Acquisitions in high-margin areas[13](index=13&type=chunk)[14](index=14&type=chunk) Fiscal Year 2025 Net Sales by Segment | Segment | Net Sales Share (Fiscal 2025) | | :----------------- | :---------------------------- | | Mobile Solutions | 62.1% | | Industrial Solutions | 29.9% | | Life Sciences | 8.0% | - Key growth drivers include providing solutions for higher performance requirements, utilizing technology for efficiencies and fuel economies, increasing new equipment production, complementing automation trends, addressing operational efficiency needs, and focusing on energy consumption and carbon footprint reduction[41](index=41&type=chunk) Research and Development Expenses (in millions) | Year | R&D Expenses | % of Net Sales | | :---- | :----------- | :------------- | | 2025 | $87.8 | 2.4% | | 2024 | $93.6 | 2.6% | | 2023 | $78.1 | 2.3% | - As of July 31, 2025, the Company had approximately **15,000 full-time employees**, with **58% in production-related roles**, guided by core values focused on integrity, employee empowerment, customer delivery, innovation, safety, sustainability, and community enrichment[53](index=53&type=chunk)[54](index=54&type=chunk) [Risk Factors](index=14&type=section&id=Item%201A.%20Risk%20Factors) The Company faces diverse risks including global operations, tariffs, supply chain disruptions, cybersecurity threats, and financial market volatility - Global operations expose the Company to risks including complex commercial and trade laws, tariffs, and potential business disruptions from unexpected events like natural disasters or pandemics[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) - Operational risks include reliance on third-party suppliers for raw materials, challenges in attracting and retaining qualified personnel, difficulties in adjusting manufacturing capacity to meet demand, the need for consistent investment in R&D to maintain competitive advantage, and threats from disruptive technologies[76](index=76&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk) - Cybersecurity risks involve the vulnerability of information technology systems, compliance with data privacy laws (e.g., GDPR, CCPA), and the increasing frequency and sophistication of security threats, which could lead to reputational damage, litigation, and increased costs[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) - Financial risks include transactional and translational exposures from foreign currency exchange rate fluctuations, and potential impacts on liquidity and financing access due to changes in capital and credit markets[92](index=92&type=chunk)[93](index=93&type=chunk) [Unresolved Staff Comments](index=18&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The Company has no unresolved staff comments from the SEC - There are no unresolved staff comments[94](index=94&type=chunk) [Cybersecurity](index=18&type=section&id=Item%201C.%20Cybersecurity) Donaldson's comprehensive cybersecurity program, integrated into enterprise risk management and overseen by the board, adheres to NIST and ISO 27001 standards, and has identified no material incidents - Donaldson's cybersecurity program is integrated within its enterprise risk management, based on NIST Cyber Security Framework and ISO 27001 standards, covering IT and operational technology environments[95](index=95&type=chunk) - Key cybersecurity processes include technical safeguards, a 24x7 security monitoring and incident response plan, annual employee training with monthly phishing exercises, and holistic risk assessments for third-party managed IT systems[96](index=96&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk) - The board of directors provides oversight of overall risk management, including cybersecurity, primarily through its audit committee, which receives regular reports from the Chief Information Officer (CIO)[102](index=102&type=chunk)[103](index=103&type=chunk) - As of the Form 10-K filing date, the Company is not aware of any cybersecurity incidents that have materially affected or are reasonably likely to materially affect its business strategy, results of operations, or financial condition[101](index=101&type=chunk) [Properties](index=19&type=section&id=Item%202.%20Properties) The Company's corporate headquarters and primary research facilities are in Minneapolis, Minnesota, with additional administrative, engineering, and research facilities globally - The Company's corporate headquarters and primary research facilities are located in Minneapolis, Minnesota, with additional administrative, engineering, and research facilities in EMEA, APAC, and LATAM regions[104](index=104&type=chunk) [Legal Proceedings](index=19&type=section&id=Item%203.%20Legal%20Proceedings) The Company records provisions for probable and estimable liabilities from claims and litigation, reviewing them quarterly, with current estimated liability deemed adequate - The Company records provisions for claims and litigation when a liability is probable and estimable, reviewing them quarterly[105](index=105&type=chunk) - The estimated liability for claims or litigation is considered adequate, and it is remote that settlements will materially exceed accrued amounts[105](index=105&type=chunk) [Mine Safety Disclosures](index=19&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - Mine Safety Disclosures are not applicable to the Company[106](index=106&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=19&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Donaldson's common stock trades on the NYSE under 'DCI', with a new stock repurchase plan authorized in November 2023, and its cumulative total stockholder return is compared against market indices - Donaldson's common stock is traded on the New York Stock Exchange under the symbol 'DCI', with **1,065 registered stockholders** as of September 12, 2025[108](index=108&type=chunk) - In November 2023, the Board authorized the repurchase of up to **12.0 million shares**, replacing a previous plan; as of July 31, 2025, **5.9 million shares** remain authorized for repurchase[110](index=110&type=chunk) Issuer Purchases of Equity Securities (Three Months Ended July 31, 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Total Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs | | :--------------------- | :--------------------- | :--------------------------- | :------------------------------------------------------------------- | :----------------------------------------------------------------------------- | | May 1 - May 31, 2025 | 251,865 | $66.72 | 251,865 | 6,479,783 | | June 1 - June 30, 2025 | 399,922 | $69.40 | 394,755 | 6,085,028 | | July 1 - July 31, 2025 | 214,353 | $70.66 | 214,353 | 5,870,675 | | **Total** | **866,140** | **$68.93** | **860,973** | **5,870,675** | Five-Year Cumulative Total Return Comparison (Investment of $100) | Company/Index | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | :------------------------- | :------ | :------- | :------- | :------- | :------- | :------- | | Donaldson Company, Inc. | $100.00 | $138.97 | $116.02 | $136.09 | $164.58 | $160.80 | | S&P 500 Stock Index | $100.00 | $136.45 | $130.12 | $147.05 | $179.62 | $208.96 | | S&P Industrial Machinery Index | $100.00 | $144.36 | $124.40 | $155.41 | $177.54 | $183.50 | [Reserved](index=21&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information - Item 6 is reserved[117](index=117&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%2