Danaher (NYSE: DHR) and Koninklijke Philips (NYSE:PHG) are both large-cap multi-sector conglomerates companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, earnings, dividends and risk.
This table compares Danaher and Koninklijke Philips’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation & Earnings
This table compares Danaher and Koninklijke Philips’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Danaher||$16.88 billion||4.10||$2.55 billion||$3.39||29.32|
|Koninklijke Philips||$27.13 billion||1.40||$1.60 billion||$1.18||34.44|
Danaher has higher earnings, but lower revenue than Koninklijke Philips. Danaher is trading at a lower price-to-earnings ratio than Koninklijke Philips, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Danaher has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500. Comparatively, Koninklijke Philips has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500.
Danaher pays an annual dividend of $0.56 per share and has a dividend yield of 0.6%. Koninklijke Philips pays an annual dividend of $0.73 per share and has a dividend yield of 1.8%. Danaher pays out 16.5% of its earnings in the form of a dividend. Koninklijke Philips pays out 61.9% 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 has increased its dividend for 5 consecutive years.
This is a summary of current ratings and price targets for Danaher and Koninklijke Philips, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Danaher currently has a consensus price target of $94.81, indicating a potential downside of 4.61%. Koninklijke Philips has a consensus price target of $37.00, indicating a potential downside of 8.96%. Given Danaher’s stronger consensus rating and higher probable upside, research analysts plainly believe Danaher is more favorable than Koninklijke Philips.
Institutional & Insider Ownership
76.1% of Danaher shares are held by institutional investors. Comparatively, 7.2% of Koninklijke Philips shares are held by institutional investors. 12.2% of Danaher shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Danaher beats Koninklijke Philips on 13 of the 17 factors compared between the two stocks.
Danaher Company Profile
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.
Koninklijke Philips Company Profile
Koninklijke Philips N.V. is the Netherlands-based health technology company. The Company’s segments include Personal Health businesses, Diagnosis & Treatment businesses, Connected Care & Health Informatics businesses, HealthTech Other and Legacy Items. The Personal Health businesses segment is engaged in the health continuum, delivering integrated, connected solutions that support healthier lifestyles and those living with chronic disease. The Diagnosis & Treatment businesses segment delivers precision medicine and treatment, and therapy. The Connected Care & Health Informatics businesses segment provides consumers, care givers and clinicians with digital solutions that facilitate care by enabling precision medicine and population health management. The HealthTech Other segment comprises such items, as innovation, emerging businesses, royalties, among others. The Legacy Items segment consists mainly of separation costs, legacy legal items, legacy pension costs, among others.
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