Financial Contrast: Danaher Corporation (DHR) & Thermo Fisher Scientific (TMO)
Danaher Corporation (NYSE: DHR) and Thermo Fisher Scientific (NYSE:TMO) are both large-cap multi-sector conglomerates companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, risk, dividends, valuation and profitability.
This is a summary of recent ratings and target prices for Danaher Corporation and Thermo Fisher Scientific, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Thermo Fisher Scientific||0||1||14||1||3.00|
Danaher Corporation presently has a consensus price target of $92.75, indicating a potential upside of 6.52%. Thermo Fisher Scientific has a consensus price target of $193.36, indicating a potential downside of 0.11%. Given Danaher Corporation’s higher probable upside, analysts clearly believe Danaher Corporation is more favorable than Thermo Fisher Scientific.
This table compares Danaher Corporation and Thermo Fisher Scientific’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Thermo Fisher Scientific||11.80%||15.97%||7.48%|
Volatility and Risk
Danaher Corporation has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500. Comparatively, Thermo Fisher Scientific has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500.
Danaher Corporation pays an annual dividend of $0.56 per share and has a dividend yield of 0.6%. Thermo Fisher Scientific pays an annual dividend of $0.60 per share and has a dividend yield of 0.3%. Danaher Corporation pays out 17.8% of its earnings in the form of a dividend. Thermo Fisher Scientific pays out 10.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Danaher Corporation has increased its dividend for 3 consecutive years. Danaher Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
75.8% of Danaher Corporation shares are held by institutional investors. Comparatively, 83.5% of Thermo Fisher Scientific shares are held by institutional investors. 12.2% of Danaher Corporation shares are held by company insiders. Comparatively, 0.5% of Thermo Fisher Scientific shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Danaher Corporation and Thermo Fisher Scientific’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Danaher Corporation||$17.43 billion||3.47||$4.16 billion||$3.14||27.73|
|Thermo Fisher Scientific||$19.20 billion||3.93||$4.81 billion||$5.74||33.72|
Thermo Fisher Scientific has higher revenue and earnings than Danaher Corporation. Danaher Corporation is trading at a lower price-to-earnings ratio than Thermo Fisher Scientific, indicating that it is currently the more affordable of the two stocks.
Thermo Fisher Scientific beats Danaher Corporation on 13 of the 18 factors compared between the two stocks.
About Danaher Corporation
Danaher Corporation (Danaher) designs, manufactures and markets professional, medical, industrial and commercial products and services. The Company operates through four segments: Life Sciences, which offers a range of research tools that scientists use to study the basic building blocks of life, including genes, proteins, metabolites and cells, in order to understand the causes of disease, identify new therapies and test new drugs and vaccines; Diagnostics; which offers analytical instruments, reagents, consumables, software and services; Dental, which provides products that are used to diagnose, treat and prevent disease and ailments of the teeth, gums and supporting bone, and Environmental & Applied Solutions, which consists of various lines of business, including water quality and product identification. As of December 31, 2016, Danaher’s research and development, manufacturing, sales, distribution, service and administrative facilities were located in over 60 countries.
About Thermo Fisher Scientific
Thermo Fisher Scientific Inc. develops, manufactures and sells a range of products. The Company provides analytical instruments, equipment, reagents and consumables, software and services for research, manufacturing, analysis, discovery and diagnostics. It operates through four segments: Life Sciences Solutions, Analytical Instruments, Specialty Diagnostics, and Laboratory Products and Services. The Life Sciences Solutions segment provides a portfolio of reagents, instruments and consumables. The Analytical Instruments segment provides a range of instruments, consumables, software and services. The Specialty Diagnostics segment offers a range of diagnostic test kits, reagents, culture media, instruments and associated products. The Laboratory Products and Services segment offers controlled temperature technologies products, growth protection and separation products, and water and laboratory products.
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