Intrinsic value of Dover - DOV

Previous Close

$94.77

  Intrinsic Value

$290.49

stock screener

  Rating & Target

str. buy

+207%

  Value-price divergence*

+298%

Previous close

$94.77

 
Intrinsic value

$290.49

 
Up/down potential

+207%

 
Rating

str. buy

 
Value-price divergence*

+298%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of DOV stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 14.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -2.33
  18.20
  16.88
  15.69
  14.62
  13.66
  12.79
  12.02
  11.31
  10.68
  10.11
  9.60
  9.14
  8.73
  8.36
  8.02
  7.72
  7.45
  7.20
  6.98
  6.78
  6.60
  6.44
  6.30
  6.17
  6.05
  5.95
  5.85
  5.77
  5.69
  5.62
Revenue, $m
  6,794
  8,031
  9,386
  10,859
  12,447
  14,147
  15,957
  17,874
  19,897
  22,022
  24,249
  26,578
  29,008
  31,539
  34,175
  36,915
  39,764
  42,725
  45,802
  49,000
  52,323
  55,779
  59,374
  63,114
  67,008
  71,064
  75,291
  79,698
  84,294
  89,091
  94,100
Variable operating expenses, $m
 
  2,342
  2,661
  3,006
  3,379
  3,779
  4,204
  4,654
  5,129
  5,628
  6,151
  6,241
  6,812
  7,407
  8,026
  8,669
  9,338
  10,034
  10,756
  11,507
  12,288
  13,099
  13,943
  14,822
  15,736
  16,689
  17,681
  18,716
  19,796
  20,922
  22,098
Fixed operating expenses, $m
 
  4,127
  4,230
  4,336
  4,444
  4,555
  4,669
  4,786
  4,905
  5,028
  5,154
  5,282
  5,415
  5,550
  5,689
  5,831
  5,977
  6,126
  6,279
  6,436
  6,597
  6,762
  6,931
  7,104
  7,282
  7,464
  7,651
  7,842
  8,038
  8,239
  8,445
Total operating expenses, $m
  5,983
  6,469
  6,891
  7,342
  7,823
  8,334
  8,873
  9,440
  10,034
  10,656
  11,305
  11,523
  12,227
  12,957
  13,715
  14,500
  15,315
  16,160
  17,035
  17,943
  18,885
  19,861
  20,874
  21,926
  23,018
  24,153
  25,332
  26,558
  27,834
  29,161
  30,543
Operating income, $m
  811
  1,562
  2,496
  3,517
  4,624
  5,813
  7,085
  8,435
  9,863
  11,366
  12,945
  15,054
  16,781
  18,583
  20,461
  22,415
  24,450
  26,566
  28,767
  31,057
  33,439
  35,918
  38,500
  41,188
  43,990
  46,912
  49,959
  53,140
  56,461
  59,931
  63,557
EBITDA, $m
  1,172
  2,179
  3,140
  4,191
  5,329
  6,553
  7,861
  9,250
  10,718
  12,264
  13,887
  15,587
  17,363
  19,215
  21,146
  23,156
  25,247
  27,423
  29,685
  32,039
  34,488
  37,037
  39,690
  42,454
  45,334
  48,337
  51,469
  54,738
  58,151
  61,717
  65,444
Interest expense (income), $m
  131
  134
  179
  227
  280
  338
  399
  464
  533
  606
  682
  762
  846
  934
  1,025
  1,120
  1,218
  1,321
  1,427
  1,538
  1,653
  1,773
  1,897
  2,027
  2,161
  2,301
  2,447
  2,599
  2,758
  2,923
  3,096
Earnings before tax, $m
  689
  1,428
  2,317
  3,290
  4,343
  5,476
  6,686
  7,971
  9,330
  10,761
  12,263
  14,292
  15,935
  17,649
  19,436
  21,296
  23,231
  25,245
  27,340
  29,518
  31,786
  34,145
  36,602
  39,162
  41,829
  44,611
  47,512
  50,540
  53,703
  57,007
  60,461
Tax expense, $m
  180
  385
  626
  888
  1,173
  1,479
  1,805
  2,152
  2,519
  2,905
  3,311
  3,859
  4,302
  4,765
  5,248
  5,750
  6,272
  6,816
  7,382
  7,970
  8,582
  9,219
  9,883
  10,574
  11,294
  12,045
  12,828
  13,646
  14,500
  15,392
  16,324
Net income, $m
  509
  1,042
  1,692
  2,401
  3,171
  3,997
  4,881
  5,819
  6,811
  7,855
  8,952
  10,433
  11,633
  12,884
  14,188
  15,546
  16,959
  18,429
  19,958
  21,549
  23,204
  24,926
  26,720
  28,588
  30,535
  32,566
  34,684
  36,895
  39,203
  41,615
  44,136

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  349
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  10,116
  11,538
  13,486
  15,602
  17,883
  20,326
  22,927
  25,682
  28,587
  31,641
  34,841
  38,187
  41,678
  45,315
  49,102
  53,039
  57,133
  61,387
  65,808
  70,402
  75,177
  80,143
  85,307
  90,682
  96,277
  102,104
  108,177
  114,508
  121,113
  128,005
  135,201
Adjusted assets (=assets-cash), $m
  9,767
  11,538
  13,486
  15,602
  17,883
  20,326
  22,927
  25,682
  28,587
  31,641
  34,841
  38,187
  41,678
  45,315
  49,102
  53,039
  57,133
  61,387
  65,808
  70,402
  75,177
  80,143
  85,307
  90,682
  96,277
  102,104
  108,177
  114,508
  121,113
  128,005
  135,201
Revenue / Adjusted assets
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
Average production assets, $m
  2,508
  2,963
  3,463
  4,007
  4,593
  5,220
  5,888
  6,596
  7,342
  8,126
  8,948
  9,807
  10,704
  11,638
  12,610
  13,622
  14,673
  15,766
  16,901
  18,081
  19,307
  20,583
  21,909
  23,289
  24,726
  26,223
  27,782
  29,408
  31,105
  32,875
  34,723
Working capital, $m
  649
  843
  986
  1,140
  1,307
  1,485
  1,675
  1,877
  2,089
  2,312
  2,546
  2,791
  3,046
  3,312
  3,588
  3,876
  4,175
  4,486
  4,809
  5,145
  5,494
  5,857
  6,234
  6,627
  7,036
  7,462
  7,906
  8,368
  8,851
  9,355
  9,880
Total debt, $m
  3,621
  4,355
  5,545
  6,838
  8,232
  9,724
  11,313
  12,996
  14,772
  16,638
  18,593
  20,637
  22,770
  24,993
  27,306
  29,712
  32,213
  34,812
  37,513
  40,321
  43,238
  46,272
  49,428
  52,711
  56,130
  59,691
  63,401
  67,270
  71,305
  75,516
  79,913
Total liabilities, $m
  6,316
  7,050
  8,240
  9,533
  10,927
  12,419
  14,008
  15,691
  17,467
  19,333
  21,288
  23,332
  25,465
  27,688
  30,001
  32,407
  34,908
  37,507
  40,208
  43,016
  45,933
  48,967
  52,123
  55,406
  58,825
  62,386
  66,096
  69,965
  74,000
  78,211
  82,608
Total equity, $m
  3,800
  4,488
  5,246
  6,069
  6,957
  7,907
  8,919
  9,990
  11,120
  12,308
  13,553
  14,855
  16,213
  17,628
  19,101
  20,632
  22,225
  23,880
  25,599
  27,386
  29,244
  31,175
  33,185
  35,275
  37,452
  39,718
  42,081
  44,544
  47,113
  49,794
  52,593
Total liabilities and equity, $m
  10,116
  11,538
  13,486
  15,602
  17,884
  20,326
  22,927
  25,681
  28,587
  31,641
  34,841
  38,187
  41,678
  45,316
  49,102
  53,039
  57,133
  61,387
  65,807
  70,402
  75,177
  80,142
  85,308
  90,681
  96,277
  102,104
  108,177
  114,509
  121,113
  128,005
  135,201
Debt-to-equity ratio
  0.953
  0.970
  1.060
  1.130
  1.180
  1.230
  1.270
  1.300
  1.330
  1.350
  1.370
  1.390
  1.400
  1.420
  1.430
  1.440
  1.450
  1.460
  1.470
  1.470
  1.480
  1.480
  1.490
  1.490
  1.500
  1.500
  1.510
  1.510
  1.510
  1.520
  1.520
Adjusted equity ratio
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389
  0.389

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  509
  1,042
  1,692
  2,401
  3,171
  3,997
  4,881
  5,819
  6,811
  7,855
  8,952
  10,433
  11,633
  12,884
  14,188
  15,546
  16,959
  18,429
  19,958
  21,549
  23,204
  24,926
  26,720
  28,588
  30,535
  32,566
  34,684
  36,895
  39,203
  41,615
  44,136
Depreciation, amort., depletion, $m
  361
  617
  645
  674
  706
  740
  776
  815
  855
  898
  943
  533
  582
  633
  685
  740
  797
  857
  919
  983
  1,049
  1,119
  1,191
  1,266
  1,344
  1,425
  1,510
  1,598
  1,690
  1,787
  1,887
Funds from operations, $m
  1,033
  1,659
  2,336
  3,076
  3,876
  4,737
  5,657
  6,634
  7,666
  8,753
  9,894
  10,966
  12,214
  13,517
  14,874
  16,286
  17,756
  19,286
  20,876
  22,531
  24,253
  26,045
  27,910
  29,854
  31,879
  33,991
  36,194
  38,493
  40,894
  43,402
  46,023
Change in working capital, $m
  171
  130
  142
  155
  167
  179
  190
  201
  212
  223
  234
  244
  255
  266
  277
  288
  299
  311
  323
  336
  349
  363
  377
  393
  409
  426
  444
  463
  483
  504
  526
Cash from operations, $m
  862
  1,530
  2,194
  2,921
  3,710
  4,559
  5,467
  6,432
  7,454
  8,530
  9,660
  10,721
  11,959
  13,251
  14,597
  15,999
  17,457
  18,975
  20,553
  22,195
  23,904
  25,682
  27,533
  29,461
  31,470
  33,565
  35,750
  38,030
  40,411
  42,898
  45,498
Maintenance CAPEX, $m
  0
  -136
  -161
  -188
  -218
  -250
  -284
  -320
  -358
  -399
  -442
  -486
  -533
  -582
  -633
  -685
  -740
  -797
  -857
  -919
  -983
  -1,049
  -1,119
  -1,191
  -1,266
  -1,344
  -1,425
  -1,510
  -1,598
  -1,690
  -1,787
New CAPEX, $m
  -165
  -455
  -500
  -543
  -586
  -627
  -668
  -707
  -746
  -784
  -822
  -859
  -897
  -934
  -972
  -1,011
  -1,051
  -1,093
  -1,135
  -1,180
  -1,226
  -1,275
  -1,326
  -1,380
  -1,437
  -1,497
  -1,560
  -1,626
  -1,696
  -1,770
  -1,848
Cash from investing activities, $m
  -1,504
  -591
  -661
  -731
  -804
  -877
  -952
  -1,027
  -1,104
  -1,183
  -1,264
  -1,345
  -1,430
  -1,516
  -1,605
  -1,696
  -1,791
  -1,890
  -1,992
  -2,099
  -2,209
  -2,324
  -2,445
  -2,571
  -2,703
  -2,841
  -2,985
  -3,136
  -3,294
  -3,460
  -3,635
Free cash flow, $m
  -642
  938
  1,533
  2,189
  2,906
  3,682
  4,515
  5,405
  6,349
  7,347
  8,397
  9,376
  10,529
  11,735
  12,992
  14,302
  15,666
  17,085
  18,561
  20,097
  21,695
  23,357
  25,088
  26,890
  28,768
  30,724
  32,765
  34,894
  37,117
  39,438
  41,863
Issuance/(repayment) of debt, $m
  909
  1,083
  1,190
  1,293
  1,394
  1,493
  1,589
  1,683
  1,775
  1,866
  1,955
  2,044
  2,133
  2,223
  2,313
  2,406
  2,501
  2,599
  2,701
  2,807
  2,918
  3,034
  3,156
  3,284
  3,419
  3,561
  3,710
  3,869
  4,035
  4,211
  4,397
Issuance/(repurchase) of shares, $m
  8
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  902
  1,083
  1,190
  1,293
  1,394
  1,493
  1,589
  1,683
  1,775
  1,866
  1,955
  2,044
  2,133
  2,223
  2,313
  2,406
  2,501
  2,599
  2,701
  2,807
  2,918
  3,034
  3,156
  3,284
  3,419
  3,561
  3,710
  3,869
  4,035
  4,211
  4,397
Total cash flow (excl. dividends), $m
  255
  2,021
  2,723
  3,482
  4,300
  5,175
  6,104
  7,088
  8,124
  9,213
  10,352
  11,420
  12,663
  13,957
  15,305
  16,708
  18,167
  19,684
  21,262
  22,904
  24,613
  26,391
  28,244
  30,174
  32,186
  34,285
  36,476
  38,763
  41,152
  43,649
  46,260
Retained Cash Flow (-), $m
  -155
  -688
  -758
  -823
  -887
  -950
  -1,012
  -1,072
  -1,130
  -1,188
  -1,245
  -1,301
  -1,358
  -1,415
  -1,473
  -1,532
  -1,592
  -1,655
  -1,720
  -1,787
  -1,858
  -1,932
  -2,009
  -2,091
  -2,176
  -2,267
  -2,362
  -2,463
  -2,569
  -2,681
  -2,799
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  1,333
  1,965
  2,659
  3,413
  4,224
  5,093
  6,016
  6,994
  8,025
  9,107
  10,119
  11,305
  12,542
  13,832
  15,176
  16,574
  18,029
  19,543
  21,117
  22,755
  24,460
  26,235
  28,083
  30,010
  32,018
  34,113
  36,300
  38,583
  40,968
  43,460
Discount rate, %
 
  7.40
  7.77
  8.16
  8.57
  8.99
  9.44
  9.92
  10.41
  10.93
  11.48
  12.05
  12.66
  13.29
  13.95
  14.65
  15.38
  16.15
  16.96
  17.81
  18.70
  19.63
  20.62
  21.65
  22.73
  23.87
  25.06
  26.31
  27.63
  29.01
  30.46
PV of cash for distribution, $m
 
  1,241
  1,692
  2,101
  2,456
  2,746
  2,963
  3,104
  3,166
  3,154
  3,072
  2,894
  2,705
  2,477
  2,222
  1,952
  1,679
  1,414
  1,165
  938
  738
  567
  425
  310
  220
  152
  102
  66
  42
  25
  15
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Dover Corporation is a diversified global manufacturer delivering equipment and components, specialty systems, consumable supplies, software and digital solutions and support services. The Company's segments include Energy, Engineered Systems, Fluids and Refrigeration & Food Equipment. The Company's Energy segment is a provider of solutions and services for production and processing of fuels around the world. Its Engineered Systems segment includes two platforms: Printing & Identification, and Industrials and is focused on the design, manufacture and service of critical equipment and components serving the fast-moving consumer goods, digital textile printing and industrial end markets. Its Fluids segment is focused on the safe handling of critical fluids across the retail fueling, chemical, and industrial end markets. The Refrigeration & Food Equipment segment is a provider of energy efficient equipment and systems serving the commercial refrigeration and food equipment end markets.

FINANCIAL RATIOS  of  Dover (DOV)

Valuation Ratios
P/E Ratio 28.9
Price to Sales 2.2
Price to Book 3.9
Price to Tangible Book
Price to Cash Flow 17.1
Price to Free Cash Flow 21.1
Growth Rates
Sales Growth Rate -2.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 7.1%
Cap. Spend. - 3 Yr. Gr. Rate 3%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 84.4%
Total Debt to Equity 95.3%
Interest Coverage 6
Management Effectiveness
Return On Assets 6.5%
Ret/ On Assets - 3 Yr. Avg. 8.7%
Return On Total Capital 7.4%
Ret/ On T. Cap. - 3 Yr. Avg. 10.3%
Return On Equity 13.7%
Return On Equity - 3 Yr. Avg. 18.1%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 36.6%
Gross Margin - 3 Yr. Avg. 37.5%
EBITDA Margin 17.4%
EBITDA Margin - 3 Yr. Avg. 18.4%
Operating Margin 11.9%
Oper. Margin - 3 Yr. Avg. 13.6%
Pre-Tax Margin 10.1%
Pre-Tax Margin - 3 Yr. Avg. 11.9%
Net Profit Margin 7.5%
Net Profit Margin - 3 Yr. Avg. 10%
Effective Tax Rate 26.1%
Eff/ Tax Rate - 3 Yr. Avg. 26.9%
Payout Ratio 52.7%

DOV stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DOV stock intrinsic value calculation we used $6794 million for the last fiscal year's total revenue generated by Dover. The default revenue input number comes from 2016 income statement of Dover. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our DOV stock valuation model: a) initial revenue growth rate of 18.2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 7.4%, whose default value for DOV is calculated based on our internal credit rating of Dover, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Dover.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of DOV stock the variable cost ratio is equal to 30.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $4026 million in the base year in the intrinsic value calculation for DOV stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.1% for Dover.

Corporate tax rate of 27% is the nominal tax rate for Dover. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the DOV stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for DOV are equal to 36.9%.

Life of production assets of 18.4 years is the average useful life of capital assets used in Dover operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for DOV is equal to 10.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $3800 million for Dover - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 157.734 million for Dover is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Dover at the current share price and the inputted number of shares is $14.9 billion.

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COMPANY NEWS

▶ How Safe Is Dover's Dividend?   [Sep-14-17 10:30AM  Motley Fool]
▶ Do-It-Yourself Breakup Talk, Dover Style   [Sep-12-17 11:31AM  Bloomberg]
▶ [$$] Dover to Explore Alternatives for Wellsite Business   [09:38AM  The Wall Street Journal]
▶ 3 Top Dividend Aristocrats to Buy Now   [Sep-03-17 08:15AM  Motley Fool]
▶ Why Is Caterpillar Soaring in 2017?   [Aug-28-17 08:35AM  Motley Fool]
▶ ETFs with exposure to Dover Corp. : August 17, 2017   [Aug-17-17 03:28PM  Capital Cube]
▶ 3 Top Dividend Aristocrats To Own Forever   [Aug-05-17 08:03AM  Motley Fool]
▶ ETFs with exposure to Dover Corp. : August 4, 2017   [Aug-04-17 07:31PM  Capital Cube]
▶ [$$] Dover Explores Strategic Alternatives for Most of Its Energy Business   [Aug-03-17 04:49PM  The Wall Street Journal]
▶ Dover beats Street 2Q forecasts   [Jul-21-17 12:30AM  Associated Press]
▶ So Two Breakup Candidates Walk Into Earnings Day...   [Jul-20-17 12:31PM  Bloomberg]
▶ Should You Buy Dover (DOV) Ahead of Earnings?   [Jul-19-17 08:49AM  Zacks]
▶ 3 History-Making Stocks   [Jul-14-17 03:30PM  Motley Fool]
▶ Better Dividend Aristocrat: 3M or Dover?   [Jul-12-17 01:47PM  GuruFocus.com]
▶ Today's top gainers   [Jul-06-17 05:02PM  CNBC Videos]
▶ Dover Corp. Value Analysis (NYSE:DOV) : July 5, 2017   [Jul-05-17 01:27PM  Capital Cube]
▶ iQ100 up over twenty four percent   [Jun-30-17 05:06PM  CNBC Videos]
▶ 3 Top Industrial Machinery Stocks to Buy in 2017   [May-13-17 11:40AM  Motley Fool]
▶ ETFs with exposure to Dover Corp. : April 24, 2017   [Apr-24-17 02:26PM  Capital Cube]
▶ Bluebirds Are Sighted Over Dover   [Apr-20-17 01:49PM  Bloomberg]
▶ Dover beats Street 1Q forecasts   [06:56AM  Associated Press]
▶ ETFs with exposure to Dover Corp. : April 7, 2017   [Apr-07-17 04:22PM  Capital Cube]
▶ Dover Corporation: Dover Acquires Caldera Graphics   [Apr-05-17 04:04PM  GlobeNewswire]
▶ [$$] This Stock Is Levered to an Energy Spending Rebound   [Apr-03-17 03:04PM  Barrons.com]
▶ ETFs with exposure to Dover Corp. : March 27, 2017   [Mar-27-17 03:54PM  Capital Cube]
Financial statements of DOV
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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