Dover (DOV) Stock Analysis
The Dover dividend has been paid since 1956 and increased its dividend for 64 consecutive years; qualifying the company as a Dividend King, Dividend Aristocrat, and Dividend Champion.
Current Dividend Annualized: $1.98
Dover (DOV) Intrinsic Value – Margin of Safety Analysis
(updated February 2021)
Normalized Diluted Earnings Per Share (TTM): $4.70
Cash Flow From Operations (CFO) Per Share (TTM): $7.60
Free Cash Flow Per Share (TTM): $6.46
Estimated Intrinsic Value: $106
BUY Price Based on Required Margin of Safety = $88
(Required Margin of Safety Based On Risk Stability Grade:
A = 10%, B = 20%, C = 30%, D = 40%, F = 50%)
Risk / Stability Grade: B
A grade indicates a quality company with a strong balance sheet, high earnings quality, and a positive business environment. These stocks require the slimmest margin of safety within the stock universe.
B grade indicates a company with a good balance sheet, good earning quality, and a stable business environment. The margin of safety required should be greater than stocks with an A grade but less than the average stock.
C grade indicates a company with a sufficient balance sheet, at least average earnings quality, and a reasonably stable business environment. The margin of safety required is greater than A & B stocks, but less than D & F stocks.
D grade indicates a company in good standing but has issues that could affect its stability and long term risks. D rated stocks should require a large margin of safety when purchased.
F grade indicates a company with significant issues that are currently affecting its stability and long term risks. Require an extremely large margin of safety for F rated stocks when purchased.
Dividend Safety Grade: B
A grade indicates an extremely low probability of a dividend cut. This rating is reserved for companies with strong balance sheets and/or excellent dividend histories.
B grade indicates a very low probability for a dividend cut.
C grade indicates a low probability for a dividend cut and/or average safety risk.
D grade indicates there are issues that should be considered concerning future dividend payments.
F grade indicates serious dividend safety risks. Investors should complete comprehensive due diligence before investing.
Earnings Quality Grade: B
A grade indicates earnings quality is high or far above average.
B grade indicates earnings quality is good and/or above average.
C grade indicates earnings quality is acceptable or average.
D grade indicates earnings quality is poor and requires thoughtful due diligence.
F grade indicates the quality of the earnings is poor or far below average requiring serious due diligence.
Earnings Report: 12/31/20
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AAAMP Portfolios Position Disclosures:
Treasure Trove Twelve – None
Dividend Growth & Income – None
Global Dividend Balanced – None
Aggressive Growth Balanced – None
High Yield Balanced – None
Global Yield – None
Industry: Specialty Industrial Machinery
Dover is a diversified global manufacturer and solutions provider with annual revenue of over $7 billion. The company delivers innovative equipment and components, consumable supplies, aftermarket parts, software and digital solutions and support services through five operating segments: Engineered Products, Fueling Solutions, Imaging & Identification, Pumps & Process Solutions, and Refrigeration & Food Equipment.
Dover competitive advantages include global scale, operational agility, world-class engineering capability, and long term customer relationships.
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.
Any global economic weakness, regardless if its cause (i.e. COVID-19), puts pressure on Dover earnings. In addition a strengthening dollar puts downward pressure on earnings.
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While Arbor Investment Planner has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability, or completeness of third-party information presented herein. The sole purpose of this analysis is information. Nothing presented herein is, or is intended to constitute investment advice. Consult your financial advisor before making investment decisions.