The industrial machinery market is vital to global manufacturing, supplying equipment for production, construction, mining, and agriculture. It has grown rapidly as industries demand faster production, higher precision, and better energy efficiency. The market is expected to grow at a CAGR of 6.9% by 2029.
The Asia-Pacific region is also at the forefront of this expansion, led by rapid industrialization in countries like China and India. Investments in Industry 4.0 and IoT technologies are transforming the industrial landscape, offering advanced solutions that streamline operations and boost competitiveness for manufacturers worldwide.
Against this backdrop, let’s compare two established industrial machinery stocks to analyze which industrial machinery stock is the superior investment: Donaldson Company, Inc. (DCI) and ITT Inc. (ITT).
The Case for Donaldson Company, Inc. stock
Valued at $8.50 billion by market cap, Donaldson Company, Inc. (DCI) manufactures and sells filtration systems and replacement parts worldwide. The company operates through three segments: Mobile Solutions, Industrial Solutions, and Life Sciences.
DCI has gained 5.7% over the past month to close the last trading session at $71.19.
In terms of the trailing-12-month gross profit margin, DCI’s 35.66% is 12.9% higher than the 31.58% industry average. Likewise, its 8.47% trailing-12-month levered FCF margin is 22.5% higher than the industry average of 6.91%.
DCI’s net sales for the fiscal first quarter that ended October 31, 2024, increased 6.4% year-over-year to $900.10 million. The company’s net earnings came in at $99 million or $0.81 per share, up 7.5% and 8.1% year-over-year, respectively.
Street expects DCI’s revenue for the fiscal second quarter (ending January 2025) to increase 3.6% year-over-year to $908.32 million. Its EPS for the same period is expected to grow 4.6% year-over-year to $0.85. In addition, it surpassed the EPS estimates in each of the trailing four quarters, which is promising.
DCI’s POWR Ratings reflect bright prospects. It has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
DCI is ranked #7 out of 78 stocks in the Industrial - Machinery industry. It has a B grade for Momentum, Stability, and Quality. To see DCI’s Growth, Value, and Sentiment ratings, click here.
The Case for ITT Inc. stock
Valued at $12.31 billion by market cap, ITT Inc. (ITT) manufactures and sells engineered critical components and customized technology solutions for the transportation, industrial, and energy markets in the United States and internationally.
ITT has gained 16.8% over the past nine months to close the last trading session at $151.02.
In terms of the trailing-12-month gross profit margin, ITT’s 34.29% is 8.6% higher than the 31.58% industry average. Its 16.84% trailing-12-month EBIT margin is 62.4% higher than the industry average of 10.37%.
ITT’s revenue for the third quarter that ended September 28, 2024, increased 7.7% year-over-year to $885.20 million. The company’s net income and earnings per share came in at $161.10 million and $1.96, respectively.
Street expects ITT’s revenue for the fourth quarter ended December 2024 to be $927.03 million. The company’s EPS for the same quarter is expected to be $9.95. Moreover, the company surpassed consensus EPS estimates in each of the trailing four quarters.
ITT’s mixed fundamentals are reflected in its POWR Ratings. The stock has an overall C rating, translating to a Neutral in our proprietary rating system.
ITT has a C grade in Value, Quality, Sentiment, and Growth. It is ranked #44 in the same industry.
Click here for the additional POWR Ratings for ITT (Momentum and Stability).
Donaldson Company, Inc. (DCI) vs. ITT Inc. (ITT): Which Industrial Machinery Stock Is the Superior Investment?
The industrial machinery market plays a crucial role in supporting industrial activities across the world. Automation, IoT, artificial intelligence, and data analytics are increasingly being embedded in machinery to enhance efficiency, productivity, and predictive maintenance capabilities, thereby driving growth in this sector.
Leading industrial machinery companies, such as DCI and ITT, stand to capitalize on the optimistic industry outlook. However, DCI’s higher profitability and promising near-term outlook favor it as the better stock pick.
Our research shows that the odds of success increase when one invests in stocks with an overall rating of Strong Buy or Buy. View all the top-rated stocks in the Industrial - Machinery industry here.
What To Do Next?
Get your hands on this special report with 3 low priced companies with tremendous upside potential even in today’s volatile markets:
3 Stocks to DOUBLE This Year >
ITT shares were trading at $148.89 per share on Monday afternoon, down $2.13 (-1.41%). Year-to-date, ITT has gained 4.21%, versus a 2.40% rise in the benchmark S&P 500 index during the same period.
About the Author: Nidhi Agarwal
Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
The post Donaldson Company, Inc. (DCI) vs. ITT Inc. (ITT): Which Industrial Machinery Stock Is the Superior Investment? appeared first on StockNews.com