Analyzing Rockwell Automation (ROK) & Thermo Fisher Scientific (TMO)

Thermo Fisher Scientific (NYSE: TMO) and Rockwell Automation (NYSE:ROK) are both large-cap medical companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Volatility and Risk

Thermo Fisher Scientific has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500. Comparatively, Rockwell Automation has a beta of 1.29, suggesting that its stock price is 29% more volatile than the S&P 500.



Earnings & Valuation

This table compares Thermo Fisher Scientific and Rockwell Automation’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 4.08 $2.23 billion $9.49 22.36
Rockwell Automation $6.31 billion 3.51 $825.70 million $6.76 26.08

Thermo Fisher Scientific has higher revenue and earnings than Rockwell Automation. Thermo Fisher Scientific is trading at a lower price-to-earnings ratio than Rockwell Automation, indicating that it is currently the more affordable of the two stocks.

Profitability

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

Net Margins Return on Equity Return on Assets
Thermo Fisher Scientific 10.24% 16.09% 7.35%
Rockwell Automation 6.34% 42.38% 13.52%

Analyst Ratings

This is a summary of current ratings and recommmendations for Thermo Fisher Scientific and Rockwell Automation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Thermo Fisher Scientific 0 1 13 0 2.93
Rockwell Automation 0 11 3 0 2.21

Thermo Fisher Scientific presently has a consensus target price of $223.42, suggesting a potential upside of 5.29%. Rockwell Automation has a consensus target price of $188.17, suggesting a potential upside of 6.74%. Given Rockwell Automation’s higher probable upside, analysts plainly believe Rockwell Automation is more favorable than Thermo Fisher Scientific.

Insider and Institutional Ownership

85.8% of Thermo Fisher Scientific shares are held by institutional investors. Comparatively, 73.0% of Rockwell Automation shares are held by institutional investors. 0.5% of Thermo Fisher Scientific shares are held by insiders. Comparatively, 1.3% of Rockwell Automation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Thermo Fisher Scientific pays an annual dividend of $0.68 per share and has a dividend yield of 0.3%. Rockwell Automation pays an annual dividend of $3.68 per share and has a dividend yield of 2.1%. Thermo Fisher Scientific pays out 7.2% of its earnings in the form of a dividend. Rockwell Automation pays out 54.4% 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. Rockwell Automation has increased its dividend for 8 consecutive years. Rockwell Automation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Thermo Fisher Scientific beats Rockwell Automation on 9 of the 17 factors compared between the two stocks.

About Thermo Fisher Scientific

Thermo Fisher Scientific Inc. provides analytical instruments, equipment, reagents and consumables, software, and services for research, manufacturing, analysis, discovery, and diagnostics under the Thermo Scientific, Applied Biosystems, Invitrogen, Fisher Scientific, and Unity Lab Services brands worldwide. Its Life Sciences Solutions segment offers reagents, instruments, and consumables for biological and medical research, discovery, and production of new drugs and vaccines, as well as diagnosis of diseases to pharmaceutical, biotechnology, agricultural, clinical, academic, and government markets. Its Analytical Instruments segment offers instruments, consumables, software, and services for use in laboratory, on production line, and in field for pharmaceutical, biotechnology, academic, government, environmental, and research and industrial markets, as well as clinical laboratories. Its Specialty Diagnostics segment offers liquid, ready-to-use, and lyophilized immunodiagnostic reagent kits, as well as calibrators, controls, and calibration verification fluids; blood-test systems; dehydrated and prepared culture media, collection and transport systems, instrumentation, and consumables; products for cancer diagnosis and medical research in histology, cytology, and hematology; human leukocyte antigen typing and testing for organ transplant market; and healthcare market channel products. This segment serves healthcare, clinical, pharmaceutical, industrial, and food safety laboratories. Its Laboratory Products and Services segment offers laboratory refrigerators and freezers, ultralow-temperature freezers and cryopreservation storage tanks, temperature control, sample preparation and preservation, centrifugation, and biological safety cabinet products; water analysis and laboratory equipment; laboratory plastics; laboratory chemicals; research and safety market channel; and pharma services. The company was founded in 1956 and is headquartered in Waltham, Massachusetts.

About Rockwell Automation

Rockwell Automation Inc. provides industrial automation and information solutions worldwide. It operates in two segments, Architecture & Software; and Control Products & Solutions. The Architecture & Software segment provides control platforms, including controllers, electronic operator interface devices, electronic input/output devices, communication and networking products, and industrial computers that perform multiple control disciplines and monitoring of applications, such as discrete, batch and continuous process, drives control, motion control, and machine safety control. This segment also offers configuration and visualization software, which is used to operate and supervise control platforms, process control software, and manufacturing execution systems and information solution software to enhance productivity and meet regulatory requirements; and other products comprising sensors, machine safety components, and linear motion control products. The Control Products & Solutions segment offers low and medium voltage electro-mechanical and electronic motor starters, motor and circuit protection devices, AC/DC variable frequency drives, push buttons, signaling devices, termination and protection devices, relays, and timers; and various packaged solutions, such as configured drives and motor control centers to automation and information solutions. This segment also offers life-cycle support services, such as technical support and repair, asset management, training, maintenance, and safety and network consulting services. The company's brands include Allen-Bradley and Rockwell Software. It serves food and beverage, home and personal care, life sciences, automotive and tire, oil and gas, and mining and metal industries through independent distributors and direct sales force in the United States, Canada, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. Rockwell Automation Inc. was founded in 1903 and is headquartered in Milwaukee, Wisconsin.

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