Head-To-Head Survey: Thermo Fisher Scientific (TMO) and Cubic (CUB)

Thermo Fisher Scientific (NYSE: TMO) and Cubic (NYSE:CUB) are both medical companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, earnings, institutional ownership, analyst recommendations and dividends.

Earnings and Valuation

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This table compares Thermo Fisher Scientific and Cubic’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Thermo Fisher Scientific $20.92 billion 3.95 $2.23 billion $9.49 21.66
Cubic $1.49 billion 1.13 -$11.20 million ($0.41) -150.61

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

Insider & Institutional Ownership

87.7% of Thermo Fisher Scientific shares are held by institutional investors. Comparatively, 88.8% of Cubic shares are held by institutional investors. 0.5% of Thermo Fisher Scientific shares are held by company insiders. Comparatively, 7.9% of Cubic shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Thermo Fisher Scientific and Cubic, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Thermo Fisher Scientific 0 1 14 0 2.93
Cubic 0 1 4 0 2.80

Thermo Fisher Scientific presently has a consensus price target of $220.92, indicating a potential upside of 7.47%. Cubic has a consensus price target of $61.00, indicating a potential downside of 1.21%. Given Thermo Fisher Scientific’s stronger consensus rating and higher possible upside, analysts clearly believe Thermo Fisher Scientific is more favorable than Cubic.

Profitability

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

Net Margins Return on Equity Return on Assets
Thermo Fisher Scientific 10.64% 16.01% 7.35%
Cubic -1.21% -1.27% -0.63%

Risk & Volatility

Thermo Fisher Scientific has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500. Comparatively, Cubic has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500.

Dividends

Thermo Fisher Scientific pays an annual dividend of $0.68 per share and has a dividend yield of 0.3%. Cubic pays an annual dividend of $0.27 per share and has a dividend yield of 0.4%. Thermo Fisher Scientific pays out 7.2% of its earnings in the form of a dividend. Cubic pays out -65.9% 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. Cubic is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Thermo Fisher Scientific beats Cubic on 12 of the 16 factors compared between the two stocks.

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.

Cubic Company Profile

Cubic Corporation provides systems and solutions for the transportation and defense markets in the United States and internationally. It operates through three segments: Cubic Transportation Systems (CTS), Cubic Global Defense Systems (CGD Systems), and Cubic Global Defense Services (CGD Services). The CTS segment provides fare collection and revenue management devices, software, systems and multiagency, multimodal integration technologies, and operational services for transportation authorities and operators. It also delivers real-time passenger information systems for tracking and predicting vehicle arrival times; urban and inter-urban intelligent transportation and enforcement solutions; and technology and infrastructure maintenance services to city, regional, and national road and transportation agencies. The CGD Systems segment provides live and virtual military training systems, and secure communication systems and products to the U.S. Department of Defense, other U.S. government agencies, and allied nations. It offers instrumented range systems for fighter aircraft, armored vehicles and infantry force-on-force live training weapons effects simulations, laser-based tactical and communication systems, and precision gunnery solutions; secure communications products for intelligence, surveillance, ground combat, and search and rescue markets; and information capture, assessment, exploitation, and dissemination in a secure network-centric environment. The CGD Services segment provides live, virtual and constructive training, real-world mission rehearsal exercises, professional military education, intelligence support, information technology, information assurance and related cyber support, development of military doctrine, consequence management, infrastructure protection, and force protection services, as well as support to field operations and logistics. The company was founded in 1949 and is headquartered in San Diego, California.

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