Dover (DOV) Stock Analysis
Current Dividend: $1.76
Dividend Yield: 2.1%
Cash Dividend Payout Ratio: 48%
Market Capitalization: 13 B
Enterprise Value: 16 B
Industry: Diversified Industrials
Dover owns and operates a portfolio (conglomerate) of more than 40 companies. DOV is organized into four divisions: Energy (21% of Revenues), Engineered Systems (34%), Fluids (20%), and Refrigeration and Food Equipment (25%).
DOV has a dual strategy of organic growth and strategic acquisitions. The company strives to have each of its companies number one or number two in its business. Then they use their global scale, operational agility, and bundled technologies in a manner that competitors find hard to replicate (moat).
Product innovation and customer relationships is where Dover shines. Diversification in businesses and geography provide some stability. High quality products and low cost producer.
Dover does business in cyclical markets that can produce some volatility in revenues and profits. High exposure to international markets and falling oil prices add to the uncertainty.
Dover uses acquisitions of smaller companies to quickly move into markets that have synergy with their current organization. Expansion of manufacturing in lower cost regions help profit margins.
Low oil prices are putting pressure on their energy division. As with all global companies, the current trend of a strengthening dollar puts downward pressure on earnings.
Dividend Analyzer Checklist
(updated June 2017)
Dividend Safety Score (15/33 points)
Dividend Per Share (ttm): $1.74
Dividend Payout Ratio (ttm): 47%
Dividend Per Share (10 Year Growth): 9%
Cash From Operations (CFO) Per Share (ttm): $5.14
CFO Dividend Coverage (CFO / DPS): 3.0 (3/6 points)
Free Cash Flow (FCF) Per Share (ttm): $4.06
FCF Dividend Coverage (FCF / DPS): 2.3 (4/6 points)
Net Financial Debt: $3221 M
Total Assets: $10238 M
Net Financial Debt / Total Assets: 31% (4/12 points)
Net Financial Debt to EBITDA (ttm): 251%
Total Liabilities to Assets Ratio (Qtr.): 61%
Piotroski Score (1-9) (TTM): (4/9 points)
Profitability & Growth Score (8/33 points)
Revenue (10 Year Growth) *CAGR > 4.14%: 0.7% (0/4 points)
EPS Basic Cont. Operations (10 Year Growth) CAGR > 4.14%: 1.0% (0/4 points)
Cash From Operations (10 Year Growth) CAGR > 4.14%: -0.4% (0/6 points)
Operating Earnings Yield (ttm): 5.7% (2/7 points)
Net Income (ttm): $582 M
Gross Profit (ttm): $2544 M
Total Assets: $10238 M
Gross Profitability Ratio = GP / Total Assets: 25% (6/12 points)
Cash Return On Invested Capital (CROIC)(tttm): 9%
Return on Invested Capital (ROIC): 8%
Return on Invested Capital (ROIC) (5 Year Median): 12%
Return on Invested Capital (ROIC) (10 Year Median): 11%
Valuation Score (18/34 points)
Free Cash Flow Yield (ttm): 4.9% (5/9 points)
EV to EBIT (ttm): 17.2 (4/9 points)
EV to EBITDA (ttm): 12.4 (4/9 points)
PE10: 20.0 (5/7 points)
Price to Sales Ratio (ttm): 1.8
Price to Book Value (ttm): 3.2
Price to Earnings Ratio (P/E) (ttm): 21.6
TOTAL POINTS – (41/100) (50 is an average score)
*Compound Annual Growth Rate (CAGR)
**A Compound Annual Growth Rate of 4.14% = a 50% gain over 10 years.
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(updated June 2017)
Type of Investor / Recommendation
Large Diversified Dividend Portfolios / Below Average Choice
Looking For Exposure to Industrials Sector / Below Average Choice
Deep Value Investors / AVOID
Dover is ranked #164 (out of 252) overall and #39 (out of 57) in the Industrials Sector by the Dividend Analyzer.
Portfolio Position Disclosures:
DVB Foundation Portfolio: None
DVB Dividend Growth: None
DVB High Income: None
Arbor Asset Allocation Model Portfolio (AAAMP): None
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