Clean Diesel Technologies (NASDAQ: CDTI) and Donaldson (NYSE:DCI) are both business services companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, risk, profitability, valuation, analyst recommendations, dividends and institutional ownership.

Valuation & Earnings

This table compares Clean Diesel Technologies and Donaldson’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Clean Diesel Technologies $28.35 million 0.36 -$5.28 million ($0.33) -1.94
Donaldson $2.37 billion 2.60 $232.80 million $1.69 28.06

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

Dividends

Donaldson pays an annual dividend of $0.72 per share and has a dividend yield of 1.5%. Clean Diesel Technologies does not pay a dividend. Donaldson pays out 42.6% of its earnings in the form of a dividend. Donaldson has raised its dividend for 33 consecutive years.

Profitability

This table compares Clean Diesel Technologies and Donaldson’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Clean Diesel Technologies -9.90% -47.77% -17.87%
Donaldson 5.29% 29.25% 12.26%

Risk & Volatility

Clean Diesel Technologies has a beta of 2.77, suggesting that its share price is 177% more volatile than the S&P 500. Comparatively, Donaldson has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for Clean Diesel Technologies and Donaldson, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Clean Diesel Technologies 0 1 1 0 2.50
Donaldson 0 4 3 0 2.43

Clean Diesel Technologies presently has a consensus target price of $2.50, suggesting a potential upside of 290.63%. Donaldson has a consensus target price of $51.25, suggesting a potential upside of 8.08%. Given Clean Diesel Technologies’ stronger consensus rating and higher possible upside, analysts plainly believe Clean Diesel Technologies is more favorable than Donaldson.

Insider and Institutional Ownership

2.1% of Clean Diesel Technologies shares are held by institutional investors. Comparatively, 79.4% of Donaldson shares are held by institutional investors. 6.3% of Clean Diesel Technologies shares are held by company insiders. Comparatively, 1.1% of Donaldson shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Donaldson beats Clean Diesel Technologies on 12 of the 17 factors compared between the two stocks.

Clean Diesel Technologies Company Profile

CDTI Advanced Materials, Inc. provides technology and solutions to the automotive emissions control markets in the United States, Canada, Sweden, France, Japan, Asia, and the United Kingdom. Its catalyst products include diesel oxidation catalysts, catalyzed diesel particulate filters, and selective catalytic reduction catalysts for emissions control from diesel engine applications; and three-way catalysts. The company also provides powder materials under the BMARS, Spinel, and MPC names for use in catalyst products for emission control from gasoline engines; and catalyst products for the control of carbon monoxide, hydrocarbons, particulate matter, and nitrogen oxide in light and heavy duty applications, as well as for energy applications. In addition, it develops a suite of high performance technologies that are offered in powder form to catalyst suppliers for inclusion in their manufacturing processes. The company supplies its coated substrates directly to exhaust systems manufacturers; catalyst technologies to the original equipment manufacturer (OEM) segment, including automakers, heavy duty truck manufacturers, catalyst manufacturers, as well as aftermarket participants, including distributors, integrators, and retrofitters; and emissions control products to automotive aftermarket suppliers and distributors under the Durafit brand. The company markets and sells its products through a network of dealers, independent distributors, and retailers. CDTI Advanced Materials, Inc. was founded in 1996 and is headquartered in Oxnard, California.

Donaldson Company Profile

Donaldson Company, Inc. manufactures and sells filtration systems and replacement parts worldwide. It operates through Engine Products and Industrial Products segments. The Engine Products segment offers replacement filters for air and liquid filtration applications, air filtration systems, liquid filtration systems for fuel, lube and hydraulic applications, and exhaust and emissions systems. This segment sells its products to original equipment manufacturers (OEM) in the construction, mining, agriculture, aerospace, defense, and truck markets; and to independent distributors, OEM dealer networks, private label accounts, and large equipment fleets. The Industrial Products segment provides dust, fume, and mist collectors; compressed air purification systems; air filtration systems for gas turbines; polytetrafluoroethylene membrane-based products; and specialized air and gas filtration systems for applications, including hard disk drives and semi-conductor manufacturing. This segment sells its products to various dealers, distributors, OEMs of gas-fired turbines, and OEMs and end-users requiring filtration solutions and replacement filters. Donaldson Company, Inc. was founded in 1915 and is based in Minneapolis, Minnesota.

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