Munger Mode rating: 3 out of 5 — Hold. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
Warren here, with Charlie's voice in my ear. Parker-Hannifin is one of those companies most people drive past without a second glance — it makes pumps, valves, seals, fittings, filters, and actuators — and yet it has quietly become one of the finest industrial franchises in America. Over the past decade, management transformed a good-but-cyclical components maker into a longer-cycle, higher-margin motion-and-control powerhouse: adjusted segment operating margins have gone from 14.5% in fiscal 2015 to 27.2% in fiscal 2026, the dividend has now been raised for 70 consecutive fiscal years (a top-five record in the entire S&P 500), and free cash flow came in at $3.9 billion this year with conversion above 100% of net income, as it has been for many years running. This is a wonderful business run by capable, honest people. Our problem is arithmetic, not quality.
Recent filings analysed: DEF 14A (2026-09-18), 8-K (2026-09-14), FWP (2026-09-08), 10-K (2026-08-21).
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