As we noted in the last week’s issue, over the past three months, one of the leaders of growth in the S&P 500 index has been the Health Care Equipment & Supplies industry (+17%).
The largest companies in this industry (by market capitalization) are Abbott ($197B), a diagnostic equipment manufacturer, and Danaher ($167B), an industrial conglomerate.
According to the latest quarterly reporting data, we analyzed each company’s profitability, strength, and efficiency criteria using the methodology of Stanford University professor Joseph Piotroski.
As you can see, in terms of fundamentals, both companies are currently performing well. Abbott is superior to Danaher in terms of sustainability, and Danaher is superior in terms of profitability. However, in general, they do not look attractive for medium- and long-term investments.
Over the past 3 months, Abbott stock has risen by +20% and Danaher by +12% (the S&P 500 index is up +12%). Abbott has not only outperformed its closest competitor, but also demonstrated almost twice the return of the index.
So, there is no single winner in today’s battle. Therefore, it is up to each individual to decide which criteria to prioritize when making an investment decision, taking into account their goals and individual risk tolerance.
