Hyster-Yale (NYSE:HY) versus Donaldson (NYSE:DCI) Financial Review

Donaldson (NYSE:DCI) and Hyster-Yale (NYSE:HY) are both industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, valuation and risk.

Dividends

Donaldson pays an annual dividend of $1.28 per share and has a dividend yield of 1.5%. Hyster-Yale pays an annual dividend of $1.46 per share and has a dividend yield of 4.8%. Donaldson pays out 33.2% of its earnings in the form of a dividend. Hyster-Yale pays out -22.3% 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 increased its dividend for 38 consecutive years and Hyster-Yale has increased its dividend for 1 consecutive years. Hyster-Yale is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Donaldson and Hyster-Yale”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Donaldson	$3.89 billion	2.61	$453.80 million	$3.85	22.79
Hyster-Yale	$3.77 billion	0.14	-$60.10 million	($6.56)	-4.62

Donaldson has higher revenue and earnings than Hyster-Yale. Hyster-Yale 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 0.87, meaning that its share price is 13% less volatile than the S&P 500. Comparatively, Hyster-Yale has a beta of 1.63, meaning that its share price is 63% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Donaldson and Hyster-Yale, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Donaldson	0	2	3	0	2.60
Hyster-Yale	1	1	2	0	2.25

Donaldson presently has a consensus target price of $101.67, indicating a potential upside of 15.89%. Hyster-Yale has a consensus target price of $47.50, indicating a potential upside of 56.83%. Given Hyster-Yale’s higher probable upside, analysts plainly believe Hyster-Yale is more favorable than Donaldson.

Profitability

This table compares Donaldson and Hyster-Yale’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%
Hyster-Yale	-3.33%	-21.03%	-4.87%

Insider & Institutional Ownership

82.8% of Donaldson shares are held by institutional investors. Comparatively, 46.5% of Hyster-Yale shares are held by institutional investors. 2.2% of Donaldson shares are held by insiders. Comparatively, 37.8% of Hyster-Yale shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Donaldson beats Hyster-Yale on 11 of the 16 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 Hyster-Yale

Hyster-Yale, Inc., through its subsidiaries, designs, engineers, manufactures, sells, and services a line of lift trucks, attachments, and aftermarket parts worldwide. The company manufactures components, such as frames, masts, and transmissions; and assembles lift trucks. It markets its products primarily under the Hyster and Yale brand names to independent Hyster and Yale retail dealerships. The company also sells aftermarket parts under the Hyster and Yale, as well as UNISOURCE and PREMIER brands to Hyster and Yale dealers for the service of competitor lift trucks. In addition, it produces and distributes attachments, forks, and lift tables under the Bolzoni, Auramo, and Meyer brand names; and designs and produces products in the port equipment and rough terrain forklift markets. Further, the company designs, manufactures, and sells hydrogen fuel-cell stacks and engines. It serves light and heavy manufacturers, trucking and automotive companies, rental companies, building materials and paper suppliers, lumber, metal products, warehouses, retailers, food distributors, container handling companies, and U.S. and non-U.S. governmental agencies. The company was formerly known as Hyster-Yale Materials Handling, Inc. and changed its name to Hyster-Yale, Inc. in June 2024. Hyster-Yale, Inc. was incorporated in 1991 and is headquartered in Cleveland, Ohio.