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Danaher (DHR) Rides on Business Strength Amid Headwinds

Danaher Corporation DHR has been benefiting from strength in its Life Sciences segment, driven by stable demand in the academic and applied markets, and strong momentum in the genomics consumables business. The company has been witnessing positive responses from its new products like IDBS' Polar Insight and Molecular Devices', which help accelerate the drug discovery process and bring new therapies to market faster. Also, in the Diagnostics unit, new solutions like Beckman Coulter's DxI 9000 next-generation immunoassay analyzer are gaining popularity.

Management remains focused on acquiring businesses to gain access to new customers, regions and product lines. In December 2023, Danaher acquired Abcam plc, a global supplier of protein consumables, for $5.7 billion.

Abcam's long track record of innovation, outstanding product quality and breadth of antibody portfolio are expected to help Danaher solve some of the world's greatest healthcare challenges. This buyout expanded DHR’s Life Sciences segment. Acquisitions boosted its total revenues by 0.5% in the first quarter of 2024.

DHR remains focused on rewarding shareholders through dividend payouts and share repurchases. For instance, in 2023, it paid dividends of $821 million, reflecting an increase of 0.4% year over year. Also, it paid out dividends worth $177 million in the first three months of 2024.

In February 2024, Danaher hiked its dividend by 12.5% to 27 cents per share. It has a dividend payout ratio of 13% and an annualized dividend yield of 0.43%.

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Zacks Investment Research

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In the past year, this Zacks Rank #3 (Hold) company has gained 15.3% compared with the industry’s 0.7% growth.

However, decreased demand in the bioprocessing business has been weighing on the performance of the Biotechnology segment. The segment’s revenues declined 18% on a year-over-year basis in the first quarter of 2024.

High debt levels have also been major concerns for the company as it raises financial obligations and might drain its profitability. Danaher exited first-quarter 2024 with a long-term debt of $16.4 billion. Its current liabilities were $7.8 billion, higher than the cash equivalents of $7 billion.

Key Picks

Some better-ranked stocks from the same space are discussed below.

Carlisle Companies Incorporated CSL presently sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter average earnings surprise of 17%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for CSL’s 2024 earnings has increased 5.8% in the past 60 days.

ITT Inc. ITT currently carries a Zacks Rank of 2 (Buy). It delivered a trailing four-quarter average earnings surprise of 6.5%.

In the past 60 days, the Zacks Consensus Estimate for ITT’s 2024 earnings has inched up 1.2%.

Griffon Corporation GFF presently carries a Zacks Rank of 2. It delivered a trailing four-quarter average earnings surprise of 33.5%.

In the past 60 days, the Zacks Consensus Estimate for GFF’s 2024 earnings has increased 4.8%.

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Danaher Corporation (DHR) : Free Stock Analysis Report

ITT Inc. (ITT) : Free Stock Analysis Report

Carlisle Companies Incorporated (CSL) : Free Stock Analysis Report

Griffon Corporation (GFF) : Free Stock Analysis Report

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