Contrasting Danaher (DHR) & Sensata Technologies (ST)

Danaher (NYSE: DHR) and Sensata Technologies (NYSE:ST) are both multi-sector conglomerates companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, institutional ownership and risk.

Volatility and Risk

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Danaher has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500. Comparatively, Sensata Technologies has a beta of 1.51, suggesting that its share price is 51% more volatile than the S&P 500.

Profitability

This table compares Danaher and Sensata Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Danaher 13.60% 11.36% 6.20%
Sensata Technologies 12.35% 25.40% 8.47%

Institutional & Insider Ownership

77.7% of Danaher shares are held by institutional investors. 11.9% of Danaher shares are held by insiders. Comparatively, 1.0% of Sensata Technologies shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Danaher and Sensata Technologies’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Danaher $18.33 billion 3.86 $2.49 billion $4.03 25.19
Sensata Technologies $3.31 billion 2.80 $408.35 million $3.19 16.92

Danaher has higher revenue and earnings than Sensata Technologies. Sensata Technologies is trading at a lower price-to-earnings ratio than Danaher, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Danaher and Sensata Technologies, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Danaher 0 4 15 0 2.79
Sensata Technologies 0 5 6 0 2.55

Danaher currently has a consensus price target of $102.62, indicating a potential upside of 1.11%. Sensata Technologies has a consensus price target of $56.45, indicating a potential upside of 4.56%. Given Sensata Technologies’ higher probable upside, analysts plainly believe Sensata Technologies is more favorable than Danaher.

Dividends

Danaher pays an annual dividend of $0.64 per share and has a dividend yield of 0.6%. Sensata Technologies does not pay a dividend. Danaher pays out 15.9% of its earnings in the form of a dividend.

Summary

Danaher beats Sensata Technologies on 11 of the 16 factors compared between the two stocks.

About Danaher

Danaher Corporation designs, manufactures, and markets professional, medical, industrial, and commercial products and services worldwide. The company's Life Sciences segment provides laser scanning, compound, surgical, and other stereo microscopes. This segment also offers filtration, separation, and purification technologies to the biopharmaceutical, food and beverage, medical, aerospace, microelectronics, and general industrial sectors. Its Diagnostics segment provides chemistry, immunoassay, microbiology, and automation systems, as well as hematology and flow cytometry products. The company offers analytical instruments, reagents, consumables, software, and services for hospitals, physicians' offices, reference laboratories, and other critical care settings. Its Dental segment provides consumables, equipment, and services to diagnose, treat, and prevent disease and ailments of the teeth, gums, and supporting bone. This segment offers implant systems, dental prosthetics, and associated treatment planning software; orthodontic bracket systems and lab products; endodontic systems and related consumables; restorative materials and instruments; infection prevention products; digital imaging systems and software; air and electric powered handpieces, and consumables; and treatment units. Its Environmental & Applied Solutions segment offers instrumentation, services, and disinfection systems to analyze, treat, and manage water in residential, commercial, industrial, and natural resource applications. This segment also provides equipment, software, services, and consumables for packaging, printing, marking, coding, and traceability applications for consumer, pharmaceutical, and industrial products. The company was formerly known as Diversified Mortgage Investors, Inc. and changed its name to Danaher Corporation in 1984. Danaher Corporation was founded in 1969 and is headquartered in Washington, the District of Columbia.

About Sensata Technologies

Sensata Technologies Holding N.V. is an industrial technology company. The Company is engaged in the development, manufacture, and sale of sensors and controls. The Company operates through two segments: Performance Sensing and Sensing Solutions. It produces a range of sensors and controls for applications, such as pressure sensors in automotive systems, thermal circuit breakers in aircraft, and bimetal current and temperature control devices. Its sensors are devices that translate a physical phenomenon, such as pressure or position, into electronic signals that microprocessors can act upon. Its controls are customized devices embedded within systems to protect them from excessive heat or current. Its primary products include low-, medium-, and high-pressure sensors, speed and position sensors, bimetal electromechanical controls, temperature sensors, power conversion and control products, thermal and magnetic-hydraulic circuit breakers, pressure switches and interconnection products.

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