Donaldson's: Like a Bond with a 13% Coupon (DCI)

Eddy Elfenbein submits: Donaldson (DCI) reported earnings yesterday of 43 cents a share, two cents better than Street estimates. The company also narrowed its full-year guidance to a range of $1.49 a share to $1.54 a share. The previous range was $1.47 to $1.57.

Since the company has already made $1.12 a share through the first three quarters of this fiscal year, it means that it's forecasting earnings of 37 cents to 42 cents a share for this quarter.

It also virtually guarantees a 17th straight year of rising earnings. Here are some historical financials on Donaldson:

Year.............Sales.................EPS
1990............$422.9...............$0.19
1991............$457.7...............$0.21
1992............$482.1...............$0.23
1993............$533.3...............$0.26
1994............$593.5...............$0.30
1995............$704.0...............$0.37
1996............$758.6...............$0.42
1997............$833.3...............$0.50
1998............$940.4...............$0.57
1999............$944.1...............$0.66
2000............$1,092.3............$0.76
2001............$1,137.0............$0.83
2002............$1,126.0............$0.95
2003............$1,218.3............$1.05
2004............$1,415.0............$1.18
2005............$1,595.7............$1.27
2006............$1,690.0............$1.53 (est)
2007............$1,780.0............$1.68 (est)

Revenues for the quarter came in on the low side. Here's a chart of Donaldson's EPS. I used a logarithmic scale so you can see how steady the increases have been. The red is the forecasted range. Also, there were some minor charges last year, which explains the slight dip.

Companies don't get much more dependable than that. Owning DCI is as close as you'll get these days to owning a bond with a 13% coupon.