Analyzing PerkinElmer (PKI) and Thermo Fisher Scientific (TMO)

PerkinElmer (NYSE: PKI) and Thermo Fisher Scientific (NYSE:TMO) are both mid-cap computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, institutional ownership, analyst recommendations, risk, valuation, dividends and profitability.

Institutional and Insider Ownership

91.7% of PerkinElmer shares are owned by institutional investors. Comparatively, 83.5% of Thermo Fisher Scientific shares are owned by institutional investors. 2.2% of PerkinElmer shares are owned by insiders. Comparatively, 0.5% of Thermo Fisher Scientific shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings for PerkinElmer and Thermo Fisher Scientific, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PerkinElmer 2 7 4 0 2.15
Thermo Fisher Scientific 0 1 14 1 3.00

PerkinElmer presently has a consensus price target of $66.91, suggesting a potential downside of 2.04%. Thermo Fisher Scientific has a consensus price target of $193.36, suggesting a potential downside of 0.11%. Given Thermo Fisher Scientific’s stronger consensus rating and higher possible upside, analysts clearly believe Thermo Fisher Scientific is more favorable than PerkinElmer.

Valuation & Earnings

This table compares PerkinElmer and Thermo Fisher Scientific’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
PerkinElmer $2.14 billion 3.52 $416.05 million $3.31 20.63
Thermo Fisher Scientific $19.20 billion 3.93 $4.81 billion $5.74 33.72

Thermo Fisher Scientific has higher revenue and earnings than PerkinElmer. PerkinElmer 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.

Volatility & Risk

PerkinElmer has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, Thermo Fisher Scientific has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500.

Profitability

This table compares PerkinElmer and Thermo Fisher Scientific’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PerkinElmer 16.80% 13.44% 6.85%
Thermo Fisher Scientific 11.80% 15.97% 7.48%

Dividends

PerkinElmer pays an annual dividend of $0.28 per share and has a dividend yield of 0.4%. Thermo Fisher Scientific pays an annual dividend of $0.60 per share and has a dividend yield of 0.3%. PerkinElmer pays out 8.5% 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. PerkinElmer is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Thermo Fisher Scientific beats PerkinElmer on 11 of the 17 factors compared between the two stocks.

PerkinElmer Company Profile

PerkinElmer, Inc. is a provider of products, services and solutions to the diagnostics, research, environmental, industrial and laboratory services markets. The Company operates through two segments: Discovery & Analytical Solutions and Diagnostics. The Discovery & Analytical Solutions segment serves the environmental, food, industrial, life sciences research and laboratory services markets. It provides analytical instrumentation for the industrial market, which includes the chemical, electronics, energy, lubricant, petrochemical and polymer industries. Its products include AAnalyst, Altus, Aquamatic, Avio, AxION, Clarus, DairyGuard, AlphaLISA, AlphaPlex, AlphaScreen, Alpha SureFire, Cell carrier and cell::explorer. The Diagnostics segment is focused on reproductive health, emerging market diagnostics and applied genomics. Its products include AutoDELFIA, BACS-on-Beads, Bioo Scientific, BoBs, Datalytix, Dexela, Dexela CMOS FPDs, Evolution, ViaCord, and Zephyr.

Thermo Fisher Scientific Company Profile

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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