3/8/25
Dover Corporation (NYSE: DOV) might not be a flashy name in the investing world, but for those who appreciate steady, long-term dividend payers, it’s a company worth knowing. Operating across a range of industrial sectors, Dover manufactures equipment and components for industries like fuel systems, refrigeration, and fluid handling. It’s the type of business that powers everyday operations behind the scenes, quietly generating revenue year after year.
For dividend investors, Dover holds a special place as one of the few Dividend Kings—companies that have increased their dividend payouts for more than 50 consecutive years. That level of consistency is rare, especially in the industrial sector, where economic cycles can cause earnings to fluctuate.
While its track record is impressive, investing in dividend stocks isn’t just about past performance. What matters is whether Dover is still a strong income-generating stock moving forward. Let’s dive into the details and see if it’s still a good fit for a dividend portfolio.
Key Dividend Metrics
📌 Dividend Yield: 1.11%
📌 5-Year Average Yield: 1.41%
📌 Annual Dividend Payout: $2.06 per share
📌 Payout Ratio: 20.32% (low and sustainable)
📌 Dividend Growth Streak: 68 consecutive years
📌 Latest Dividend Increase: 1.3%
📌 Ex-Dividend Date: February 28, 2025
📌 Dividend Payment Date: March 14, 2025
Dividend Overview
Dover’s current dividend yield sits at 1.11%, which is lower than its five-year average of 1.41%. A lower yield can sometimes indicate that the stock price has risen faster than its dividend payouts, which appears to be the case here. Investors looking for high yield may not be drawn to Dover, but those seeking steady income and long-term growth might appreciate what it offers.
One of Dover’s strongest qualities is its consistency. It has raised its dividend every year for nearly 70 years, making it one of the longest-running dividend growers in the market. The most recent increase was a modest 1.3%, which isn’t particularly exciting but reinforces the company’s commitment to steady payouts.
The payout ratio, sitting at just 20.32%, is a major positive. This means the company only uses a small fraction of its earnings to cover dividends, leaving plenty of room for reinvestment and future increases. Even during economic downturns, Dover is unlikely to face pressure to cut its dividend.
Dividend Growth and Safety
A strong dividend stock needs two things: reliable earnings and solid cash flow. Dover checks both boxes.
✔️ Earnings Coverage: With a trailing price-to-earnings (P/E) ratio of 18.44 and a forward P/E of 19.80, Dover is still generating strong profits. The low payout ratio makes its dividend highly sustainable.
✔️ Cash Flow Strength: The company brought in $748 million in operating cash flow over the past year, along with $1.14 billion in free cash flow. This means there’s plenty of cash available to keep dividend payments going without strain.
✔️ Balance Sheet: Dover has $1.84 billion in cash and $3.16 billion in debt, leading to a debt-to-equity ratio of 45.49%. While it carries some debt, this is a manageable level for an industrial company with consistent cash flow.
✔️ Recession Resilience: Dover has weathered multiple economic downturns without cutting its dividend. The diversified nature of its business provides some insulation from severe economic swings.
Chart Analysis
Price Action and Moving Averages
Dover Corporation (DOV) has experienced a notable shift in momentum, as shown by its recent price action. The stock was in a strong uptrend for much of the past year, making higher highs and higher lows. However, that pattern appears to be breaking down, with the stock now dipping below its 50-day moving average and testing the 200-day moving average.
The 50-day moving average had been a solid area of support during prior pullbacks, but the recent drop below it suggests a loss of short-term bullish momentum. More concerning is that the stock is now hovering right around its 200-day moving average. This level often acts as a key psychological and technical support for long-term investors. If the stock fails to hold above it, the risk of further downside increases.
Volume and Market Participation
Volume has been picking up in recent sessions, particularly on down days. This is something to watch closely, as rising volume on declines can indicate stronger selling pressure. A clear spike in volume was seen during a recent sharp drop, suggesting that larger players may be lightening their positions.
On the other hand, there have been some high-volume green bars as well, which indicates that buyers are stepping in at lower levels. This mixed volume pattern suggests indecision in the market, and the next significant move—whether up or down—will likely be confirmed by the direction of volume.
RSI and Momentum Indicators
Looking at the Relative Strength Index (RSI), the stock has moved into a lower range, suggesting weakening momentum. It has not yet reached oversold levels, but it is trending in that direction. If RSI falls below 30, it would indicate that the stock is deeply oversold and could be due for a short-term bounce.
At the same time, the RSI has been steadily declining over the past few months, reinforcing the idea that momentum is shifting. The stock’s ability to hold above the 200-day moving average could be crucial in determining whether this is just a correction or the start of a larger downtrend.
Recent Candlestick Patterns
The last few candles show a mix of indecision and volatility. The stock opened lower but managed to close near its highs on one session, indicating buyers are still active. However, the presence of long upper wicks in recent sessions suggests that rallies are being met with selling pressure.
The stock’s ability to reclaim the 50-day moving average or firmly hold the 200-day will determine its next direction. If selling continues with strong volume, further downside could be in play. On the other hand, a strong reversal with volume could signal that buyers are stepping in at key levels.
Analyst Ratings
Dover Corporation (DOV) has received mixed attention from analysts recently, with some firms raising their expectations while others have taken a more cautious stance. The stock’s consensus price target currently sits around $218.91, suggesting a potential upside of approximately 17.79% from its recent closing price of $185.64.
📈 Upgrades:
🔹 JPMorgan recently raised its price target to $230, citing the company’s strong operational performance and improving demand across its industrial segments. Analysts noted Dover’s ability to maintain stable margins despite macroeconomic uncertainty and supply chain challenges. The firm expects continued efficiency improvements and strategic acquisitions to drive further growth.
🔹 Goldman Sachs also boosted its price target to $235, expressing confidence in Dover’s ability to expand in high-margin businesses. The investment bank highlighted the company’s disciplined approach to cost management and the potential for organic growth in its engineered systems and clean energy solutions segments.
📉 Downgrades:
🔻 Wolfe Research took a more conservative approach, adjusting its price target from $231 to $230. While the downgrade was minor, it reflects some concerns over slowing order growth in certain industrial markets. Analysts pointed to potential headwinds from economic uncertainty, which could weigh on capital expenditures and reduce demand for Dover’s products.
🔻 Another firm maintained a neutral rating, noting that while Dover’s fundamentals remain solid, the stock may already be fairly valued at current levels. They pointed to the recent break below the 50-day moving average as a sign that momentum could be slowing, making them hesitant to raise their outlook.
These mixed perspectives show that while Dover continues to be a well-regarded industrial stock, analysts are split on whether its current valuation leaves room for significant short-term gains.
Earning Report Summary
Dover Corporation wrapped up 2024 with a steady performance, showing resilience in a mixed economic environment. The company managed to grow revenue slightly while making strategic moves to streamline operations and improve long-term profitability.
Fourth Quarter Performance
Dover brought in about $1.9 billion in revenue for the fourth quarter, up 1% from the same period last year. It wasn’t a huge jump, but given the broader economic conditions, steady growth is still a win.
On the earnings side, the company reported $238 million in net income, which was down 8% year-over-year. This dip was mostly due to restructuring costs and some one-time charges that impacted the bottom line. Earnings per share (EPS) came in at $1.72, a slight drop from the previous year. However, on an adjusted basis, which strips out those one-off expenses, EPS was $2.20, a small but positive 1% increase.
Full-Year Results
For all of 2024, Dover posted $7.7 billion in revenue, again up 1% from 2023. It’s not explosive growth, but it’s consistent. The real standout number was net income, which jumped 48% to $1.4 billion. This big gain was largely due to some strategic divestitures that added to Dover’s profits.
EPS for the full year landed at $10.09, up a massive 50% from 2023. Even after adjusting for one-time items, EPS still showed a solid 4% increase, coming in at $8.29.
How Different Segments Performed
- Clean Energy & Fueling did well, thanks to higher demand for sustainable energy solutions and fueling technology.
- Pumps & Process Solutions had a steady year, driven by strong sales in biopharma components and industrial pumps.
- Climate & Sustainability Technologies had some ups and downs. There was weakness in certain European markets, but gains in CO₂ refrigeration and other sustainable technologies helped balance things out.
Key Moves and Looking Ahead
Dover didn’t just sit back and watch; the company made several strategic plays in 2024.
- Selling Off Non-Core Assets: Dover sold its De-Sta-Co business, pocketing $530 million in pre-tax gains. This sale helps the company focus on higher-margin businesses.
- Stock Buybacks: Dover spent $500 million repurchasing shares, reducing its share count and boosting shareholder value.
- Restructuring: Some of the recent expenses were related to making operations leaner, particularly in clean energy and sustainability-focused divisions.
Going into 2025, the company is optimistic. Demand for biopharma and clean energy solutions looks promising, and Dover is doubling down on improving efficiency and controlling costs. The foundation is solid, and while the economy may throw some challenges, Dover appears well-positioned to keep delivering steady results.
Financial Health and Stability
Dover isn’t just a dividend stock—it’s also a fundamentally strong company.
- Revenue Growth: Over the past year, revenue totaled $7.75 billion, with a 1.3% year-over-year increase in the most recent quarter. Growth isn’t explosive, but it’s steady.
- Profitability: The company has a profit margin of 34.82% and an operating margin of 17.41%, both solid numbers for an industrial firm.
- Return on Equity (ROE): At 23.22%, Dover’s ROE shows strong profitability and efficient use of capital.
While it may not be a high-growth stock, Dover maintains stable financials that make it a reliable dividend payer.
Valuation and Stock Performance
Dover’s stock price is currently at $185.64, down from its 52-week high of $222.31. While the stock has performed well over the long run, recent movements have been more volatile.
Looking at its valuation:
📌 Trailing P/E: 18.44 – reasonable for an industrial leader
📌 Forward P/E: 19.80 – slightly above its historical range
📌 PEG Ratio (5-year expected): 2.34 – suggests the stock may be fairly valued
📌 Price-to-Book: 3.67 – slightly higher than usual
At these levels, the stock isn’t particularly cheap, but it’s not overpriced either. Investors looking for a better entry point might consider waiting for a pullback closer to the $175 range, which would make the dividend yield a bit more attractive.
Risks and Considerations
Every stock carries some level of risk, and Dover is no exception.
⚠️ Economic Sensitivity: As an industrial company, Dover’s business depends on economic cycles. During recessions, demand for its products can slow down, potentially impacting revenue.
⚠️ Interest Rates and Debt: With a debt-to-equity ratio of 45.49%, Dover’s balance sheet is solid but not immune to rising interest rates. Higher borrowing costs could impact future profitability.
⚠️ Slower Dividend Growth: Recent dividend increases have been small, with the latest at just 1.3%. For investors looking for aggressive dividend growth, this could be a drawback.
⚠️ Competitive Landscape: Dover competes with industrial giants like Emerson Electric and Parker Hannifin. Increased competition or market shifts could pressure earnings over time.
Final Thoughts
Dover Corporation is one of the most reliable dividend stocks out there, with an incredible 68-year track record of dividend increases. It has strong cash flow, a low payout ratio, and financial stability that ensures dividends remain secure.
That said, the current yield isn’t particularly high, and the dividend growth rate has slowed in recent years. Investors who prioritize dividend safety and long-term reliability will likely find Dover appealing. However, those looking for higher yields or faster-growing dividends may want to explore other options.
For long-term investors, Dover remains a steady, well-run industrial company with a dependable payout history. The stock isn’t at a bargain price right now, but if it pulls back to around $175, it could be a more attractive opportunity for those looking to add a strong dividend stock to their portfolio.
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