DANAHER CORP /DE/ (DHR) Stock Analysis
DANAHER CORP /DE/ (DHR) Stock Analysis
Analysis from 10-Q filed 2025-10-21. Data as of Q4 2025.
Overall Grade: F (Concerning)
DANAHER CORP /DE/ faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 5.6% | Below expectations |
| FCF Margin | 21.4% | Strong cash generation |
| Debt/Equity | 0.4x | Conservative leverage |
Investment Thesis: Healthy free cash flow margin of 21.4% provides financial flexibility for growth and shareholder returns.
Explore DANAHER CORP /DE/: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: DANAHER CORP /DE/ earns 5.6% ROIC, Top 50% in Other
DANAHER CORP /DE/'s trailing-twelve-month ROIC of 5.6% ranks Top 50% in Other companies (sector median: 4.3%), driven by NOPAT margin of 16.2% combined with asset turnover of 0.3x. Source: 10-Q filed 2025-10-21. Gross margin of 59.1% with operating margin at 19.1% reflects strong pricing power.
| Metric | DHR | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 5.6% | Warning | Above sector median of 4.3% |
| Return on Equity (ROE) | 7.0% | Warning | Moderate equity returns |
| Gross Margin | 59.1% | Excellent | Strong pricing power |
| Operating Margin | 19.1% | Good | Efficient operations |
Cash Flow: DANAHER CORP /DE/ generates $5.3B FCF at 21.4% margin, positive NaN/8 quarters
DANAHER CORP /DE/ generated $5.3B in free cash flow (TTM), a 21.4% FCF margin, a margin that ranks Top 5% in Other. Operating cash flow exceeds net income by 1.8x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-10-21.
| Metric | DHR | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 21.4% | Excellent | Excellent cash conversion |
| Free Cash Flow (TTM) | $5.3B | Good | Positive cash generation |
| OCF/Net Income | 1.8x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: DANAHER CORP /DE/ at 0.4x leverage
DANAHER CORP /DE/'s debt-to-equity ratio of 0.4x reflects moderate leverage. Total debt of $18.4B offset by $4.6B in cash. Source: 10-Q filed 2025-10-21.
| Metric | DHR | Rating | Context |
|---|---|---|---|
| Debt to Equity | 0.4x | Good | Conservative capital structure |
| Net Cash Position | $-13.8B | Warning | Net debt position |
Valuation: DANAHER CORP /DE/ trades at 45.2x earnings
DANAHER CORP /DE/ trades at a P/E of 45.2x. Free cash flow yield of 3.2% reflects market expectations for growth.
| Metric | DHR | Rating | Context |
|---|---|---|---|
| P/E Ratio | 45.2x | Adequate | Premium valuation |
| EV/Sales | 7.2x | Adequate | Growth premium priced in |
| FCF Yield | 3.2% | Adequate | Lower cash yield |
| Dividend Yield | 0.5% | Adequate | Growth focus over income |
Capital Allocation: DANAHER CORP /DE/ returns 2.4% shareholder yield
DANAHER CORP /DE/'s total shareholder yield is 2.4% (dividends 0.5% + buybacks 1.9%). Source: 10-Q filed 2025-10-21.
| Metric | DHR | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 2.4% | Adequate | Dividend + buyback yield combined |
| Buyback Yield | 1.9% | Adequate | Minimal buyback activity |
| Total Capital Returned (TTM) | $4.0B | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 5.6% | Top 50% | 1.3x above |
| Free Cash Flow Margin | 21.4% | Top 5% | - |
| Gross Margin | 59.1% | Top 25% | 1.9x above |
| Operating Margin | 19.1% | Top 25% | 3.8x above |
| Return on Equity (ROE) | 7.0% | Top 50% | 1.0x above |
| P/E Ratio | 45.2x | N/A | - |
Financial Scorecard
| Metric | DHR | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 5.6% | Warning | Top 50% of sector (median: 4.3%) |
| Free Cash Flow Margin | 21.4% | Excellent | Top 5% of sector (median: 0.0%) |
| Gross Margin | 59.1% | Excellent | Top 25% of sector (median: 31.5%) |
| Debt to Equity Ratio | 35.1% | Good | Moderate leverage |
| P/E Ratio (Price-to-Earnings) | 45.2x | Adequate | High expectations priced in |
| Free Cash Flow Yield | 3.2% | Adequate | Moderate yield |
Frequently Asked Questions
Q: What is DANAHER CORP /DE/'s Return on Invested Capital (ROIC)?
DANAHER CORP /DE/ (DHR) has a trailing twelve-month Return on Invested Capital (ROIC) of 5.6%. This compares above the sector median of 4.3%. An ROIC below 8% suggests the company may be destroying shareholder value.
Q: What is DANAHER CORP /DE/'s Free Cash Flow Margin?
DANAHER CORP /DE/ (DHR) has a free cash flow margin of 21.4%, generating $5.3 billion in free cash flow over the trailing twelve months. A FCF margin above 20% indicates excellent cash conversion and a high-quality business model.
Q: Is DANAHER CORP /DE/ stock overvalued or undervalued?
DANAHER CORP /DE/ (DHR) trades at a P/E ratio of 45.2x, which is above the sector median of N/A. The EV/Sales multiple is 7.2x. Free cash flow yield is 3.2%, which is in line with market averages.
Q: Does DANAHER CORP /DE/ pay a dividend?
DANAHER CORP /DE/ (DHR) currently pays a dividend yield of 0.5%. Including share buybacks, the total shareholder yield is 2.4%. The relatively low yield suggests the company prioritizes growth reinvestment over income distribution.
Q: What is DANAHER CORP /DE/'s revenue and earnings growth?
DANAHER CORP /DE/ (DHR) grew revenue by 2.9% year-over-year. Earnings per share decreased by 4.5% compared to the prior year. Modest growth indicates a mature business with stable demand.
Q: Is DANAHER CORP /DE/ buying back stock?
DANAHER CORP /DE/ (DHR) repurchased $3.1 billion of stock over the trailing twelve months. This represents a buyback yield of 1.9%.
Q: How does DANAHER CORP /DE/ compare to competitors in Other?
Compared to other companies in Other, DANAHER CORP /DE/ (DHR) shows: ROIC of 5.6% is above the sector median of 4.3% (Top 46%). FCF margin of 21.4% exceeds the sector median of 0.0% (Top 0% of sector). Gross margin at 59.1% is 27.6 percentage points higher than sector peers. These rankings are based on MetricDuck's analysis of all Other companies with available SEC filings.
Q: What warning signs should I watch for with DANAHER CORP /DE/?
DANAHER CORP /DE/ (DHR) shows no major financial warning signs based on current metrics. However, investors should always monitor: 1) Margin compression trends, 2) Cash flow consistency, 3) Debt levels relative to cash generation, and 4) Changes in competitive positioning.
Data Source: Data sourced from 10-Q filed 2025-10-21. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.