Danaher (DHR) & Cognex (CGNX) Financial Comparison

Danaher (NYSE: DHR) and Cognex (NASDAQ:CGNX) are both multi-sector conglomerates companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, dividends, risk, institutional ownership, profitability and valuation.

Risk and Volatility

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Danaher has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500. Comparatively, Cognex has a beta of 1.58, indicating that its share price is 58% more volatile than the S&P 500.

Institutional & Insider Ownership

77.7% of Danaher shares are held by institutional investors. Comparatively, 82.3% of Cognex shares are held by institutional investors. 11.9% of Danaher shares are held by company insiders. Comparatively, 5.4% of Cognex shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations for Danaher and Cognex, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Danaher 0 4 15 0 2.79
Cognex 0 4 4 0 2.50

Danaher presently has a consensus price target of $104.06, indicating a potential upside of 3.10%. Cognex has a consensus price target of $64.58, indicating a potential upside of 30.05%. Given Cognex’s higher possible upside, analysts plainly believe Cognex is more favorable than Danaher.

Profitability

This table compares Danaher and Cognex’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Danaher 13.60% 11.36% 6.20%
Cognex 23.69% 24.23% 21.65%

Earnings & Valuation

This table compares Danaher and Cognex’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Danaher $18.33 billion 3.84 $2.49 billion $4.03 25.04
Cognex $747.95 million 11.48 $177.17 million $1.45 34.25

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

Dividends

Danaher pays an annual dividend of $0.64 per share and has a dividend yield of 0.6%. Cognex pays an annual dividend of $0.18 per share and has a dividend yield of 0.4%. Danaher pays out 15.9% of its earnings in the form of a dividend. Cognex pays out 12.4% 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.

Summary

Cognex beats Danaher on 9 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 Cognex

Cognex Corporation provides machine vision products that capture and analyze visual information in order to automate tasks primarily in manufacturing processes worldwide. The company offers machine vision products, which are used to automate the manufacturing and tracking of discrete items, such as mobile phones, aspirin bottles, and automobile tires by locating, identifying, inspecting, and measuring them during the manufacturing or distribution process. Its products include VisionPro, a software suite that provides various vision tools for programming; displacement sensors with vision software for use in 3D application; In-Sight vision systems that perform various vision tasks, including part location, identification, measurement, assembly verification, and robotic guidance; In-Sight vision sensors; ID products, including DataMan barcode readers and barcode verifiers, as well as vision-enabled mobile terminals for industrial barcode reading applications; and barcode scanning software development kits. The company sells its products to customers in the consumer electronics and automotive industries, and semiconductor and electronics capital equipment markets through direct sales force, as well as through a network of distributors and integrators. Cognex Corporation was founded in 1981 and is headquartered in Natick, Massachusetts.

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