100 Year Recipe: For Growing Dividends

This year, Donaldson Company Inc (NYSE: DCI), a leading manufacturer of filters, has increased dividend payments yet again by 8.7%. This marks Donaldson’s twenty-seventh consecutive year of annual dividend increases…surprised yet? 

The company has been paying dividends every quarter for the last 67 years, showcasing an ever-progressing growth. Donaldson hasn’t been shy in using its excess cash flow to improve returns for shareholders. How does Donaldson do this? And can they continue to sustain such a trajectory moving forward? 

Clearly, there’s a secret in the sauce, and Donaldson has been constantly optimizing not only their filters but also their production processes, which ultimately improved the company’s margins. These principals have had broad benefits for the company’s success and investors alike, as they are constantly developing new technologies that adapt to the needs of their clients.

It’s no surprise that they have managed to increase dividends over the years; as Donaldson’s strategy of expanding their product offerings to multiple industries and countries, resulted in increased revenue every year, which allowed it to distribute more earnings per share to investors; going from $10 million in revenue in 1959 all the way to $700 million by 1995.  

Over the decades, Donaldson (NYSE: DCI) has been able to position itself as a world-leading filtration company in more than 140 countries, covering 6 continents. Thanks to a demand in countless industries they are able to serve in all shapes and sizes, ranging from aerospace, agriculture, construction, food, beverages, manufacturing, and transportation. In reality, these products and technologies are not always in plain sight, but they are present in hundreds of applications and machineries, from excavators to hearing aids and from airplane cabins to grain processing plants.

Now the question on everyone’s mind; can Donaldson (NYSE: DCI) continue this streak of success? 

Without a doubt, Donaldson (NYSE: DCI) is a company that has managed to overcome all the obstacles that have been presented. Its fantastic developments have recently on June 6, 2023, even opened the doors to the 43rd Annual William Blair Growth Stock Conference, a privilege that only 260 companies in the world get to enjoy. 

So after more than 100 years of growth and success, will the road to ever growing dividends end or continue to grow?