Sandvik (OTCMKTS:SDVKY) vs. Donaldson (NYSE:DCI) Head to Head Analysis

Sandvik (OTCMKTS:SDVKY) and Donaldson (NYSE:DCI) are both large-cap industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, earnings, dividends and risk.

Dividends

Sandvik pays an annual dividend of $0.42 per share and has a dividend yield of 1.2%. Donaldson pays an annual dividend of $1.28 per share and has a dividend yield of 1.5%. Sandvik pays out 29.0% of its earnings in the form of a dividend. Donaldson pays out 33.2% 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. Donaldson is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Sandvik and Donaldson’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sandvik	13.05%	18.45%	9.99%
Donaldson	11.68%	28.68%	14.27%

Analyst Recommendations

This is a summary of current ratings for Sandvik and Donaldson, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sandvik	1	8	3	1	2.31
Donaldson	0	2	3	0	2.60

Donaldson has a consensus price target of $101.67, suggesting a potential upside of 16.68%. Given Donaldson’s stronger consensus rating and higher probable upside, analysts clearly believe Donaldson is more favorable than Sandvik.

Insider & Institutional Ownership

0.7% of Sandvik shares are owned by institutional investors. Comparatively, 82.8% of Donaldson shares are owned by institutional investors. 2.2% of Donaldson shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Sandvik and Donaldson”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sandvik	$12.34 billion	3.64	$1.50 billion	$1.45	24.66
Donaldson	$3.89 billion	2.60	$453.80 million	$3.85	22.63

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

Risk & Volatility

Sandvik has a beta of 1.51, suggesting that its share price is 51% more volatile than the S&P 500. Comparatively, Donaldson has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500.

Summary

Donaldson beats Sandvik on 9 of the 17 factors compared between the two stocks.

About Sandvik

Sandvik AB (publ), an engineering company, provides products and solutions for mining and rock excavation, metal cutting, and materials technology worldwide. The company offers mining and rock excavation equipment, including drill rigs and bolters, underground loaders and trucks, mechanical cutting equipment, rock tools and rock drills, and mining automation; rock processing equipment, such as crushers, screens, hydraulic breakers, demolition tools, and breaker booms. It also provides metal-cutting tools and tooling systems, and digital solutions and software; metal powder for additive manufacturing, and components made from controlled expansion alloys; and tungsten powders, as well as recycling services of secondary tungsten raw materials. The company serves aerospace, automotive, energy, general engineering, infrastructure, and mining industries. Sandvik AB (publ) was founded in 1862 and is headquartered in Stockholm, Sweden.

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.