Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A+ . The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 11.7%. Since the same quarter one year prior, revenues rose by 25.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- DHR's debt-to-equity ratio is very low at 0.27 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.05, which illustrates the ability to avoid short-term cash problems.
- DANAHER CORP has improved earnings per share by 31.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DANAHER CORP increased its bottom line by earning $2.76 versus $2.52 in the prior year. This year, the market expects an improvement in earnings ($3.23 versus $2.76).
- The gross profit margin for DANAHER CORP is rather high; currently it is at 56.30%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 13.20% is above that of the industry average.
- Net operating cash flow has significantly increased by 52.26% to $1,008.97 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 5.42%.
Danaher Corporation designs, manufactures, and markets professional, medical, industrial, and commercial products and services primarily in North America, Europe, and Asia/Australia. The company has a P/E ratio of 17.3, above the average industrial industry P/E ratio of 16.4 and below the S&P 500 P/E ratio of 17.7. Danaher has a market cap of $37.05 billion and is part of the
industry. Shares are up 13% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.