Donaldson (NYSE:DCI – Get Free Report) and Oshkosh (NYSE:OSK – Get Free Report) are both industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, dividends, earnings, profitability and institutional ownership.
Analyst Ratings
This is a summary of current ratings and target prices for Donaldson and Oshkosh, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Donaldson | 0 | 2 | 3 | 0 | 2.60 |
| Oshkosh | 0 | 6 | 11 | 0 | 2.65 |
Donaldson currently has a consensus price target of $101.00, indicating a potential upside of 12.58%. Oshkosh has a consensus price target of $170.71, indicating a potential upside of 12.31%. Given Donaldson’s higher probable upside, analysts plainly believe Donaldson is more favorable than Oshkosh.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Donaldson | $3.89 billion | 2.68 | $453.80 million | $3.85 | 23.30 |
| Oshkosh | $10.42 billion | 0.90 | $647.00 million | $8.74 | 17.39 |
Oshkosh has higher revenue and earnings than Donaldson. Oshkosh is trading at a lower price-to-earnings ratio than Donaldson, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Donaldson has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500. Comparatively, Oshkosh has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500.
Profitability
This table compares Donaldson and Oshkosh’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Donaldson | 11.68% | 28.68% | 14.27% |
| Oshkosh | 5.24% | 12.95% | 5.86% |
Insider and Institutional Ownership
82.8% of Donaldson shares are owned by institutional investors. Comparatively, 92.4% of Oshkosh shares are owned by institutional investors. 2.2% of Donaldson shares are owned by insiders. Comparatively, 0.6% of Oshkosh shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Dividends
Donaldson pays an annual dividend of $1.28 per share and has a dividend yield of 1.4%. Oshkosh pays an annual dividend of $2.28 per share and has a dividend yield of 1.5%. Donaldson pays out 33.2% of its earnings in the form of a dividend. Oshkosh pays out 26.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Donaldson has raised its dividend for 38 consecutive years and Oshkosh has raised its dividend for 13 consecutive years. Oshkosh is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Oshkosh beats Donaldson on 9 of the 17 factors compared between the two stocks.
About Donaldson
Donaldson Company, Inc. manufactures and sells filtration systems and replacement parts worldwide. The company operates through three segments: Mobile Solutions, Industrial Solutions, and Life Sciences. Its Mobile Solutions segment provides replacement filters for air and liquid filtration applications, such as air filtration systems; liquid filtration systems for fuel, lube, and hydraulic applications; exhaust and emissions systems and sensors; indicators; and monitoring systems. This segment sells its products to original equipment manufacturers (OEMs) in the construction, mining, agriculture, aerospace, defense, and transportation markets; and to independent distributors, and OEM dealer networks. The company's Industrial Solutions segment offers dust, fume, and mist collectors; compressed air and industrial gasses purification systems; and hydraulic and lubricated rotating equipment applications, as well as gas and liquid filtration for industrial processes. This segment sells its products to various distributors, OEMs, and end-users. Its Life Sciences segment provides micro-environment gas and liquid filtration for food, beverage, and industrial processes; bioprocessing equipment, that includes bioreactors and fermenters; and bioprocessing consumables, such as chromatography devices, reagents and filters, and polytetrafluoroethylene membrane-based products, as well as specialized air and gas filtration systems for applications, including hard disk drives, semi-conductor manufacturing and sensors, battery systems, and powertrain components to OEMs and various end-users. The company was founded in 1915 and is headquartered in Bloomington, Minnesota.
About Oshkosh
Oshkosh Corporation provides purpose-built vehicles and equipment worldwide. The company operates through three segments: Access, Defense, and Vocational segment. Its Access Equipment segment design and manufacture aerial work platform and telehandlers for use in construction, industrial, and maintenance applications; offers financing and leasing solutions including rental fleet loans, leases, and floor plan and retail financing; and towing and recovery equipment, which includes carriers, wreckers, and rotators, as well as provides equipment installation and sale of chassis and service parts. The Defense segment engages in the manufacture and sale of heavy, medium, and light tactical wheeled vehicles and related services for department of defense. Its Vocational segment offers custom and commercial firefighting equipment, fire apparatus, and emergency vehicles, including pumpers, aerial platform, ladder and tiller trucks, and tankers; light, medium, and heavy-duty rescue vehicles; and wildland rough terrain response, bomb squad, hazardous materials control vehicles, mobile command and control centers, and other emergency response vehicles. Additionally, this segment produces and sells custom and commercial firefighting vehicles, as well as command vehicles, ARFF vehicles; design and manufacture refuse collection vehicles for waste services industry; front discharge concrete mixers for the concrete ready-mix industry; and field service vehicles and truck-mounted cranes for construction, equipment dealer, building supply, utility, tire service, railroad, and mining industries. Further, the company provides its products through direct sales representatives, dealers, and distributors. Oshkosh Corporation was formerly known as Oshkosh Truck Corporation. The company was founded in 1917 and is headquartered in Oshkosh, Wisconsin.
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