Critical Contrast: Waters (NYSE:WAT) & Thermo Fisher Scientific (NYSE:TMO)

Waters (NYSE:WAT) and Thermo Fisher Scientific (NYSE:TMO) are both large-cap healthcare companies, but which is the better investment? We will compare the two companies based on the strength of their risk, dividends, analyst recommendations, institutional ownership, valuation, earnings and profitability.

Earnings and Valuation

This table compares Waters and Thermo Fisher Scientific”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Waters	$3.17 billion	14.65	$642.63 million	$2.33	202.52
Thermo Fisher Scientific	$44.56 billion	5.97	$6.70 billion	$18.96	37.86

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

Risk and Volatility

Waters has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500. Comparatively, Thermo Fisher Scientific has a beta of 0.84, indicating that its share price is 16% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Waters	1.75%	9.91%	6.11%
Thermo Fisher Scientific	14.94%	17.33%	8.18%

Analyst Recommendations

This is a summary of current recommendations for Waters and Thermo Fisher Scientific, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Waters	0	6	17	1	2.79
Thermo Fisher Scientific	0	4	23	2	2.93

Waters presently has a consensus price target of $475.48, indicating a potential upside of 0.77%. Thermo Fisher Scientific has a consensus price target of $683.64, indicating a potential downside of 4.76%. Given Waters’ higher possible upside, analysts clearly believe Waters is more favorable than Thermo Fisher Scientific.

Institutional and Insider Ownership

94.0% of Waters shares are held by institutional investors. Comparatively, 89.2% of Thermo Fisher Scientific shares are held by institutional investors. 0.3% of Waters shares are held by insiders. Comparatively, 0.3% of Thermo Fisher Scientific shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Thermo Fisher Scientific beats Waters on 10 of the 15 factors compared between the two stocks.

About Waters

Waters Corporation develops and supplies analytical instruments, software, and consumables used to identify, measure, and characterize chemical and biological materials. Its products include liquid chromatography and mass spectrometry systems, which help customers analyze complex samples. The company serves pharmaceutical and biotechnology businesses, academic and government laboratories, and customers in fields such as food, environmental testing, and materials science. Waters operates internationally, with customers and operations across multiple regions.

About Thermo Fisher Scientific

Thermo Fisher Scientific develops and supplies products and services used in scientific research, clinical diagnostics, and pharmaceutical and biotechnology manufacturing. Its offerings include laboratory instruments, reagents and consumables, analytical equipment, diagnostic tests, and services that support drug development and clinical research. The company operates through businesses focused on life sciences, analytical instruments, specialty diagnostics, and laboratory products and biopharma services.