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Key Reasons to Retain Danaher (DHR) Stock in Your Portfolio

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Danaher Corporation (DHR - Free Report) is backed by multiple tailwinds despite some margin pressure due to raw material cost inflation and supply chain disruptions.

DHR is benefiting from strong performance of the Life Sciences segment due to healthy demand for bioprocessing products. The bioprocessing business is poised to benefit from high activity levels from early-stage research to later-stage development and production. The company expects healthy demand for products related to molecular testing and higher non-COVID testing volumes to aid the Diagnostics segment.
 
Danaher’s Environmental & Applied Solutions segment should benefit from healthy consumables business and solid demand for equipment. The company now expects core revenue growth above the prior guidance of low-single digits for the third quarter of 2022.

The improvement is due to expectations of higher Cepheid respiratory testing revenues of more than $500 million in the third quarter compared with the prior view of approximately $325 million. DHR anticipates base business core revenue growth of high-single digits for the third quarter.


Over time, Danaher has relied on inorganic activities to boost its competency. In August 2021, it acquired Aldevron, strengthening its foothold in the genomic medicine field. The company added Vanrx Pharmasystems and Swift Biosciences to its portfolio in first-quarter 2021. In second-quarter 2022, acquisitions boosted its sales by 2.5%.

Danaher is committed to handsomely rewarding its shareholders through dividend payments. The company paid dividends worth $411 million in the first six months of 2022, up 14.2% on a year-over-year basis. In 2021, it used $742 million to pay out dividends, reflecting a year-over-year increase of 20.7%.

In light of the abovementioned positives, we believe investors should hold onto this Zacks Rank #3 (Hold) stock for now.

Key Picks

Some better-ranked stocks within the Conglomerates sector are as follows:

Carlisle Companies (CSL - Free Report) currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for CSL’s 2022 earnings has been revised upward by 14.7% in the past 90 days. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks.

Carlisle has an estimated earnings growth rate of 114.4% for the current year. Shares of CSL have rallied 16.3% in the past three months.

Icahn Enterprises (IEP - Free Report) presently carries a Zacks Rank #2. The Zacks Consensus Estimate for IEP’s 2022 earnings has been revised upward by more than 100% in the past 90 days.

Icahn Enterprises has an estimated earnings growth rate of 144.4% for the current year. Shares of IEP have gained 2.5% in the past three months.


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