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 revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, increase in net income and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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Highlights from the ratings report include:
- DHR's revenue growth has slightly outpaced the industry average of 2.1%. Since the same quarter one year prior, revenues slightly increased by 5.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- DHR's debt-to-equity ratio is very low at 0.28 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 1.18, which illustrates the ability to avoid short-term cash problems.
- DANAHER CORP has improved earnings per share by 12.7% 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 $3.23 versus $2.77 in the prior year. This year, the market expects an improvement in earnings ($3.45 versus $3.23).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Industrial Conglomerates industry average. The net income increased by 10.4% when compared to the same quarter one year prior, going from $570.71 million to $630.40 million.
- 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 12.67% is above that of the industry average.
Danaher Corporation designs, manufactures, and markets professional, medical, industrial, and commercial products and services primarily in North America, Europe, and Asia/Australia. Danaher has a market cap of $42.32 billion and is part of the industrial goods sector and industrial industry. The company has a P/E ratio of 19, above the S&P 500 P/E ratio of 17.7. Shares are up 9.5% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.
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