Danaher: Great Total Return And In The Sweet Spot With Increasing Cash Flow Allowing Growth Of The Business

Danaher: Great Total Return And In The Sweet Spot With Increasing Cash Flow Allowing Growth Of The Business


Danaher’s recent quarter earnings beat expected results by $0.24 on the bottom line, and top-line beat by 23%, with an excellent gain over last year’s results.

Danaher’s 70-month total return is fantastic, beating the Dow 70-month baseline by 265.92%, an increase from the last quarter.

Danaher’s three-year forward CAGR of 22% is great and will give you long-term growth with the increasing demand for more medical and industrial products as the pandemic worldwide continues.

SDI Productions/E+ via Getty Images Danaher (NYSE: DHR ) company designs, manufactures, and markets professional, medical, industrial, and commercial products and services is a buy for the total return investor, buy the dip. Danaher, a worldwide company in 60 countries, has steady growth and has plenty of cash flow, which it uses to increase the dividend each year and buy bolt-on companies. Danaher is 1.7% of The Good Business Portfolio; my IRA portfolio of good business companies is balanced among all styles of investing.

As I have said before in previous articles: I use a set of guidelines that I codified over the last few years to review the companies in The Good Business Portfolio (my portfolio) and other companies that I am reviewing. For a complete set of guidelines, please see my article ” The Good Business Portfolio: Update to Guidelines, March 2020 “. These guidelines provide me with a balanced portfolio of income, defensive, total return, and growing companies that hopefully keep me ahead of the Dow average. The Fundamentals, Buy

The method I use to compare companies is to look first at the total return compared to the market. If a company cannot beat the market, why do you want to invest in that company? The great Danaher total return of 365.52% compared to the Dow base of 99.60% over my 70-month test period makes it a fantastic investment for the total return investor. Looking back five years, $10,000 invested five years ago would now be worth over $34,182 today. This gain makes Danaher a great investment for the total return investor looking back, which has future growth with increased earnings as the COVID-19 virus is controlled worldwide. Overall, Danaher is a good business with an S&P CFRA 3-year CAGR of 22% projected growth as the United States and foreign economies grow going forward, with the increasing demand for Danaher’s products and services as the COVID virus gets under control worldwide in the next year.

Danaher right now is in the sweet spot as the demand for the company’s products continues to grow worldwide. The revenues YOY for the last quarter grew by 23% and should continue for at least a year as the rest of the world catches up on vaccinating their populations.

Danaher is not an income investment but makes up for the low yield with strong growth as the global medical products and service business is expanded. Danaher has a good cash flow at $6.8 billion/year, and the company uses some of the cash to expand its business by buying bolt-on companies and increasing dividends each year, increasing the value for the shareholders. A quote from the third-quarter earnings call by CEO Rainer Blair sums up the good fundamentals for the past quarter and increased growth from the company’s buyouts. Our team delivered another outstanding result in our third quarter with over 20% core revenue growth, nearly 40% adjusted earnings per share growth and strong free cash flow generation, and we certainly saw this powerful combination in action during the third quarter as our results attest. Now we also talked about our sustainability efforts. And just last week, we published our 2021 sustainability report. This year’s report reflects the measurable progress we’ve made across the three pillars of our sustainability program, which are innovation, people, and the environment, and how we use the Danaher Business System to execute on this increasingly important strategic priority. Let’s turn to our third-quarter results. Our sales were $7.2 billion, and we delivered 20.5% core revenue growth with portfolio-wide strength led by Diagnostics and Life Sciences. Geographically, high-growth markets grew approximately 25%, and developed markets were up nearly 20%. In fact, revenue in each of our three largest markets, North America, Western Europe, and China, was up approximately 20% or more in the quarter. Our gross profit margin increased by 550 basis points to 60.3% primarily due to higher sales volumes, the favorable impact of higher-margin product mix, and the impact of prior-year purchase accounting adjustments related to the Cytiva acquisition that did not repeat […]

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