Danaher Corporation (DHR): A Long Term Buy Despite CFO Sells

Danaher seems to be the most profitable company in comparison to its peers including General Electric Company (NYSE:GE) and SPX Corporation (NYSE:SPW). Trailing twelve months Danaher generated a 17% operating margin, while the operating margin of General Electric and SPX were 12% and 7%, respectively. Interestingly, Danaher has the cheapest valuation among the three companies. At the current price, Danaher is valued at 11.5x EV/EBITDA. With the total market cap of $236.3 billion, GE is valued at 18.26x EV/EBITDA. SPX is the smallest company with only $3.8 billion in market cap. The market is valuing SPX at 12.95x EV/EBITDA.

Foolish Bottom Line

Indeed, with the mergers & acquisition growth strategy, investors have to bet on management’s capital allocation skills. Danaher’s management has consistently increased Danaher’s free cash flow over the past 10 years, showing that they could deliver shareholders’ value over the long time. Indeed, Danaher could be considered a long-term stock for investors.

The article A Long Term Buy Despite CFO Sells originally appeared on Fool.com and is written by Anh HOANG.

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