Financial Analysis: Donaldson (DCI) vs. Evoqua Water Technologies (AQUA)

Donaldson (NYSE: DCI) and Evoqua Water Technologies (NYSE:AQUA) are both mid-cap industrial products companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, dividends, analyst recommendations, earnings and institutional ownership.

Dividends

Donaldson pays an annual dividend of $0.72 per share and has a dividend yield of 1.5%. Evoqua Water Technologies does not pay a dividend. Donaldson pays out 40.7% of its earnings in the form of a dividend. Donaldson has increased its dividend for 32 consecutive years.

Profitability

This table compares Donaldson and Evoqua Water Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Donaldson 9.57% 28.49% 12.28%
Evoqua Water Technologies 8.90% 44.93% 6.20%

Valuation and Earnings

This table compares Donaldson and Evoqua Water Technologies’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Donaldson $2.37 billion 2.65 $232.80 million $1.77 27.32
Evoqua Water Technologies N/A N/A N/A $0.29 79.41

Donaldson has higher revenue and earnings than Evoqua Water Technologies. Donaldson is trading at a lower price-to-earnings ratio than Evoqua Water Technologies, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Donaldson and Evoqua Water Technologies, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Donaldson 0 4 1 0 2.20
Evoqua Water Technologies 0 4 4 0 2.50

Donaldson presently has a consensus price target of $49.75, suggesting a potential upside of 2.87%. Evoqua Water Technologies has a consensus price target of $23.88, suggesting a potential upside of 3.67%. Given Evoqua Water Technologies’ stronger consensus rating and higher possible upside, analysts plainly believe Evoqua Water Technologies is more favorable than Donaldson.

Insider & Institutional Ownership

77.6% of Donaldson shares are owned by institutional investors. 1.1% of Donaldson shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Donaldson beats Evoqua Water Technologies on 8 of the 13 factors compared between the two stocks.

Donaldson Company Profile

Donaldson Company, Inc. is a manufacturer of filtration systems and replacement parts. The Company’s segments include Engine Products, Industrial Products and Corporate. The Company’s products are manufactured at approximately 44 plants around the world and through three joint ventures. The Company offers its products under the Ultra-Web, PowerCore and Donaldson brands. The Engine Products segment sells its products to original equipment manufacturers (OEMs) in the construction, mining, agriculture, aerospace, defense and truck end-markets and to independent distributors, OEM dealer networks, private label accounts and large equipment fleets. The Industrial Products segment sells to various industrial dealers, distributors, OEMs of gas-fired turbines and OEMs and end users requiring clean air. Its products include dust, fume and mist collectors, compressed air purification systems, air filtration systems for gas turbines and polytetrafluoroethylene (PTFE) membrane-based products.

Evoqua Water Technologies Company Profile

Evoqua Water Technologies Corp. is focused on providing water treatment solutions. The Company is offering services, systems and technologies to support customers’ full water lifecycle needs. The Company offers a comprehensive portfolio of differentiated, proprietary technology solutions. The Company operates through three segments Industrial, Municipal and Products. Industrial Segment provides fully-integrated systems and service solutions that selectively utilize its comprehensive portfolio of water treatment technologies to satisfy its customers’ unique water needs. Municipal Segment provides engineered solutions and equipment for the treatment of wastewater, purification of drinking water and odor and corrosion control for municipalities. Products Segment sells differentiated technologies to a diverse set of water treatment system specifiers, integrators and end users globally.

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