Donaldson CoDCI -0.08%94 WACC % is 9.31% as of Jun. 26, 2026, which is 3% above its 10-year median of 9.04. GuruFocus rates DCI with a GF Score™ of 94/100 and a GF Value™ of $81.12 (Fairly Valued). The stock has 1 warning sign investors should review. Among 3,093 Industrial Products companies, Donaldson Co ranks better than 53.86% on this metric.
As of today (2026-06-26), Donaldson Co's weighted average cost of capital is 9.31%%. Donaldson Co's ROIC % is 18.95% (calculated using TTM income statement data).
Donaldson Co generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
For a comprehensive WACC calculation, please access the WACC Calculator.
Donaldson Co (NYSE:DCI) WACC % Explanation
Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Donaldson Co's weighted average cost of capital is 9.31%%. Donaldson Co's ROIC % is 18.95% (calculated using TTM income statement data).
Donaldson Co generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
Related Terms
Donaldson Co WACC % Historical Data
* Premium members only.
The historical data trend for Donaldson Co's WACC % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Specialty Industrial Machinery subindustry, Donaldson Co's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Donaldson Co WACC % vs Industrial Products Industry
For the Industrial Products industry and Industrials sector, Donaldson Co's WACC % distribution charts can be found below:
* The bar in red indicates where Donaldson Co's WACC % falls into.
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Donaldson Co's market capitalization (E) is $10320.719 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Apr. 2026, Donaldson Co's latest one-year quarterly average Book Value of Debt (D) is $672.06 Mil.
a) weight of equity = E / (E + D) = 10320.719 / (10320.719 + 672.06) = 0.9389
b) weight of debt = D / (E + D) = 672.06 / (10320.719 + 672.06) = 0.0611
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 4.376%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Donaldson Co's beta is 0.8888.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 4.376% + 0.8888 * 6% = 9.7088%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Apr. 2026, Donaldson Co's interest expense (positive number) was $28.4 Mil. Its total Book Value of Debt (D) is $672.06 Mil.
Cost of Debt = 28.4 / 672.06 = 4.2258%.
4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = 129.8 / 568.6 = 22.83%.
Donaldson Co's Weighted Average Cost Of Capital (WACC) for Today is calculated as:
WACC
=
E / (E + D)
*
Cost of Equity
+
D / (E + D)
*
Cost of Debt
*
(1 - Tax Rate)
=
0.9389
*
9.7088%
+
0.0611
*
4.2258%
*
(1 - 22.83%)
=
9.31%
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Donaldson Co (DCI) has a WACC % of 9.31% as of Jun. 26, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Donaldson Co and its competitors. This is near median its historical median of 9.04. Over the past decade, Donaldson Co's WACC % has ranged from 7.65 to 10.94. According to the industry distribution chart, Donaldson Co ranks #1427 out of 3093 companies in the Industrial Products industry, placing it in the top 46.1%.
Is Donaldson Co's WACC % too high?
Donaldson Co's current WACC % of 9.31% is near median its 10-year median of 9.04. Over the past 10 years, this metric has ranged from a low of 7.65 to a high of 10.94. The Industrial Products industry median WACC % is 9.77. Donaldson Co's value of 9.31% is 4.7% below this industry median. Based on the distribution chart, Donaldson Co ranks #1427 out of 3093 companies in the Industrial Products industry, which is above the industry midpoint. Overall, Donaldson Co has a GF Score™ of 94/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Donaldson Co's WACC % compare to FLS and GTLS?
According to the Industrial Products industry distribution chart, Donaldson Co ranks #1427 out of 3093 companies for WACC %. This puts Donaldson Co in the upper half of its industry. The industry median WACC % is 9.77. Donaldson Co's value of 9.31% is 4.7% below this benchmark. Historically, Donaldson Co's own WACC % has ranged from 7.65 to 10.94 over the past decade. While the company's 10-year median is 9.04 vs. the industry median of 9.77, Donaldson Co has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good WACC % for an Industrial Products company?
The median WACC % among Industrial Products companies is 9.77, based on 3,093 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Donaldson Co's current WACC % of 9.31% is 4.7% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Donaldson Co and its competitors. For the Industrial Products industry, the median WACC % is 9.77 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Donaldson Co's current WACC % is 9.31%, which is near median its own 10-year median of 9.04. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Donaldson Co stock overvalued right now?
Based on GuruFocus' analysis, Donaldson Co (DCI) is currently considered Fairly Valued. The stock's GF Value™ is $81.12, compared to a current price of $89.04 — trading 9.8% above its estimated fair value. The current WACC % is 9.31%, which is near median its 10-year median of 9.04 and 4.7% below the Industrial Products industry median of 9.77. Donaldson Co's overall GF Score™ is 94/100 with 1 warning sign to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is WACC % calculated?
WACC % is calculated from a company's financial statements. For Donaldson Co (DCI), the current WACC % is 9.31% as of Jun. 26, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Donaldson Co (DCI) Overvalued in 2026?
Based on GuruFocus' analysis, Donaldson Co stock appears to be overvalued.
The current stock price of $89.04 is trading 9.8% above its estimated GF Value™ of $81.12.
GuruFocus considers Donaldson Co to be Fairly Valued.
Key valuation signals for DCI:
WACC %: 9.31% (near median its 10-year median of 9.04)
GF Value™: $81.12 vs. price of $89.04 (9.8% above fair value)
Industry Position: 4.7% below the Industrial Products median (#1427 of 3093)
No single metric tells the full story. See the DCI stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Donaldson is a leading manufacturer of filtration systems and replacement parts, including air filtration systems, liquid filtration systems, and dust, fume, and mist collectors. The company serves a diverse range of end markets, including construction, mining, agriculture, truck, and industrial. Its business is organized into three segments: mobile solutions, industrial solutions, and life sciences. Donaldson generated approximately $3.7 billion in revenue in its fiscal 2025.
94GF Score
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