TMO Stock Overview
Thermo Fisher Scientific Inc. offers life sciences solutions, analytical instruments, specialty diagnostics, and laboratory products and service worldwide.
Thermo Fisher Scientific Competitors
Price History & Performance
|Historical stock prices|
|Current Share Price||US$522.93|
|52 Week High||US$672.34|
|52 Week Low||US$497.83|
|1 Month Change||-3.79%|
|3 Month Change||-4.06%|
|1 Year Change||-8.10%|
|3 Year Change||80.85%|
|5 Year Change||170.58%|
|Change since IPO||5,662.90%|
Recent News & Updates
What Does Thermo Fisher Scientific Inc.'s (NYSE:TMO) Share Price Indicate?
Thermo Fisher Scientific Inc. ( NYSE:TMO ) saw significant share price movement during recent months on the NYSE...
Thermo Fisher wins FDA OK of Oncomine Dx Target test to aid in cancer therapy selection
The US FDA has granted approval to Thermo Fisher Scientific's (NYSE:TMO) Oncomine Dx Target test to help determine which cancer patients may benefit from Eli Lilly’s (LLY) Retevmo (selpercatinib). The test is specifically approved for patients with RET-fusion positive advanced or metastatic non-small cell lung cancer, thyroid cancer, and and RET-mutation positive advanced or metastatic medullary thyroid cancer. The Oncomine Dx Target test is a considered a companion diagnostic and next-generation sequencing-based test. Oncomine Dx was already approved to determine treatment for those with non-small cell lung cancer and cholangiocarcinoma and various other oncology treatments. Read why Seeking Alpha contributor Leo Nelissen argued that Thermo Fisher (TMO) is one of the best dividend stocks to own.
Thermo Fisher: One Of The Best Dividend Stocks Money Can Buy
Summary In this article, I start by providing a theoretical foundation that explains why owning low-yielding stocks makes sense. Thermo Fisher is a low-yielding dividend growth stock with the ability to outperform the market with a low-volatility profile. Its product portfolio helps the company to withstand cyclical risks, supply chain woes, and high inflation. Introduction It's time to discuss one of the best stocks money can buy: Thermo Fisher Scientific (TMO). The company does have a yield close to zero percent, yet it's a terrific dividend stock for a number of reasons. The company has a fantastic business model allowing it to withstand severe economic storms, high inflation, and supply chain woes - we are currently dealing with all of this. Thanks to these qualities, the company has a history of strong dividend growth, outperforming capital gains (by a mile), and a low-volatility profile, which makes investing large sums of money quite interesting. I own the company's largest peer Danaher Corp. (DHR) and I'm considering adding TMO as buying quality dividend growth and low volatility is the best way to generate long-term wealth. In July, I covered the company's core business and opportunities as well as its low yield. In this article, I will incorporate current events including comments from the Morgan Stanley Healthcare conference that show that TMO is well-equipped against challenges like supply chain difficulties, high inflation, and slowing economic growth. So, let me walk you through my thoughts! Starting with some theoretical background. Why Dividend Growth Makes Sense - Despite A Low Yield I always like to combine companies with a macro thesis or a theoretical background. Especially when covering very low-yielding dividend stock, I believe it's important to provide the necessary background. Thermo Fisher is currently paying a $0.30 per share per quarter dividend. That's $1.20 per year. In order to get that, investors need to hold a share, which is currently trading at $540. That's more expensive than a PlayStation 5, resulting in a yield of just 0.22%. In other words, a $10,000 investment would end up paying $22 per year. It is clear that Thermo Fisher isn't the stock you want to buy when looking for high income - or income in general. Personally, I like buying a decent yield. However, I also like owning high-quality stocks that let me sleep like a baby, especially when the market is volatile and bombed my uncertainty and macroeconomic issues, which is currently the case. While I will get into that in this article, let's look into the reasons why dividends are important in the first place. Morgan Stanley hit the nail on the head when it found that dividend payers return way more than non-dividend payers. A recent study by FactSet shows that dividend-paying stocks outperform their non-paying counterparts by a dramatic amount. From 1991 through 2015, non-dividend paying stocks earned just +4.18% return per year while dividend paying stocks significantly outperformed with a +9.7% average annual return. Essentially, this is caused by dividends being a "stamp of approval". Operating a business is hard. Distributing cash is harder. Doing it consistently while growing dividends is even harder. Companies paying a dividend show that they are able to compete while letting shareholders benefit in the process. That's great quality and something shareholders can rely on, especially when recessions cause uncertainty to skyrocket. Moreover, dividend growth stocks often protect dividends against inflation, which adds to the "quality" aspect of an investment. In a 2022 paper, Hartford Funds compared dividend stocks to Volvo cars, which I think was quite fitting: Dividend-paying stocks are like the Volvos of the investing world. They’re not fancy at first glance, but they have a lot going for them when you look deeper under the hood. The same research paper showed that both dividend payers and dividend growers outperformed the equal-weight S&P 500 index by a mile on a long-term basis. Moreover, the paper mentions the "quality" aspect in the text above the chart below. Being a dividend grower is basically a sign of strong fundamentals. Also, and this is important, companies that pay dividends need to be more careful with their cash flows. They need to make smarter decisions to protect the dividend and to make sure that investments allow for future dividend growth. It's truly a fantastic controlling mechanism, I think. Hartford Funds Moreover, the quality aspect protects investors a bit during bear markets. Don't get me wrong, most dividend stocks will also suffer when markets tank. However, odds are they do better as investors will rather sell non-dividend paying companies or companies that struggle, in general, when re-risking their portfolios. These companies are often non-dividend paying companies. As the chart below shows, both dividend growth and high-yield stocks outperform the broader market while doing it with less volatility. While I do own a number of rather volatile stocks, I am a big believer in investing in low volatility because it tends to provide outperformance without a lot of drama. This is especially important when selling investments somewhere in the future. Low-volatility stocks are much more reliable. Vanguard Now, you know why I cannot stop talking about low-yielding dividend stocks. Thermo Fisher - High-Quality Dividends Before we dive into financial numbers and whatnot, let me show you that Thermo Fisher has indeed proven to be a source of low-volatility outperformance. Going all the way back to 1988, the stock has returned 15.9% per year. This beats the S&P 500 by more than 500 basis points. The standard deviation was 27.9%, which is rather high compared to the S&P 500. Yet, TMO still beat the S&P 500 on a volatility-adjusted basis (Sharpe/Sortino ratios). Portfolio Visualizer Moreover, the somewhat high volatility of TMO was caused by the company being somewhat young in the 20 years prior to the 2000s. Over the past 20 years, the company has returned 16.6% per year. The standard deviation has come down to 22.1%. Even the worst drawdown was "just" 44%, that's more than 600 basis points better than the S&P 500's performance during the Great Financial Crisis. Portfolio Visualizer With that said, the "worst" thing about TMO is its yield as we already briefly discussed, yet it's also the only thing that might bother a potential investor. Looking at the Seeking Alpha dividend scorecard, we see that the company scores extremely high on dividend safety and dividend growth compared to its healthcare sector peers. Seeking Alpha The 10-year average annual dividend growth rate is 16.1%, which is impressive. These are the most "recent" hikes: February 2022: 15.0% February 2021: 18.0% February 2020: 16.0% TMO Dividend data by YCharts The payout ratio is rather low, which explains why dividend safety is scoring so high. Using $18.80 in earnings per share over the past four quarters and the aforementioned $1.20 annual dividend, the payout ratio is a mere 6.4%. A Top Tier Business Model With a sub-10% payout ratio, Thermo Fisher obviously has other priorities than to get rid of its cash through dividends. Below, I listed some of the ways to get rid of cash: stock repurchases (also issuance of stock), common dividends paid, and cash acquisitions. TIKR.com Thermo Fisher has a genius business model, which is based on high free cash flow generation, which is then used to buy more growth (acquisitions), which then generates more free cash flow used to repay debt. The graph below shows that spikes in net debt always lead to lower debt levels in the years that follow as free cash flow is growing rapidly. Between 2016-2024E, free cash flow is growing by 15.5% CAGR. That's truly impressive. Next year, the implied FCF yield is 4.0%, which is rather high. This allows for a quick debt reduction to $22.1 billion according to analyst estimates. That would imply a 1.7x net leverage multiple. Hence, it is no surprise that the company has a BBB+ debt rating. I believe it won't take long until the company enters the A-range. TIKR.com With that said, let's dive a bit deeper as I haven't even explained what Thermo Fisher does exactly - almost 1,300 words into this article. Thermo Fisher is basically a healthcare supplier. It sells equipment for Life Science Solutions, Specialty Diagnostics, Analytical Instruments, Laboratory Products, and Biopharma Services. For example, in its biggest segment, Life Sciences Solutions, the company: [...] provides an extensive portfolio of reagents, instruments and consumables used in biological and medical research, discovery and production of new drugs and vaccines as well as diagnosis of infection and disease. These products and services are used by customers in pharmaceutical, biotechnology, agricultural, clinical, healthcare, academic, and government markets. Life Sciences Solutions includes four primary businesses – Biosciences, Genetic Sciences, Clinical Next-Generation Sequencing, and BioProduction. With more than 100,000 employees, the company is a powerhouse in the industry with what it believes is a $225 billion total addressable market. The company sees between 4% to 6% in annual long-term growth. Achieving these growth numbers would be a good deal. However, TMO is growing by 7% to 9% in this industry - organically! This is thanks to its innovative products, experienced sales force, and a great relationship with customers. Using Seeking Alpha's handy overview of historical annual growth rates (including acquired growth), we see that the company has grown its top line by more than 13% per year over the past 10 years. Thanks to higher margins, this resulted in roughly 18% average annual EBITDA growth and close to 19% in annual net income growth. The earnings per share growth rate was slightly lower as TMO does not engage in net buybacks. Gross buybacks are offset by stock-based compensation and M&A activities. Seeking Alpha With this in mind, let me show you some comments from the recent Morgan Stanley Annual Global Healthcare Conference where Thermo Fisher mentioned a few things that are extremely important given ongoing supply chain problems, slowing global growth, and high inflation. First of all, the company is extremely resilient. This is based on its own abilities and the fact that healthcare is anti-cyclical to a large extent. During the Great Financial Crisis, sales in TMO's market fell only 3%. The rebound afterward was much stronger. Moreover, the company's product mix has become much more favorable compared to almost 14 years ago: When I think about how the company, how we've evolved our mix by executing our strategy, the company is -- has a more favorable set of end markets than we did back at the end of the 2000s. And today, pharmaceutical and biotech which is the least economically exposed end market, represents just under 60% of our core revenue. And back then, it was about 1/4 of our core revenue. And our consumables and service business is about 85% of our revenue. Back then, it was about 2/3 of our revenue. So the company's mix has evolved and that positions us to navigate whatever the world throws at us. Moreover, in Europe, the company still sees positive organic growth despite severe economic challenges. It has also gotten rid of natural gas in its facilities, which will be a huge benefit if rationing is applied during the winter months. The same goes for the (still ongoing) shortages in semiconductors, electronic parts, and related. The company was able to maintain strong organic growth as it has great relationships with suppliers. After all, the company is a giant with preferred customer status at many suppliers - which is something I assume given the results. This basically means that when inventories fall, suppliers provide the best supplies to their preferred customers. These are mainly large corporations with innovation and pricing power. While this data isn't public, I assume that TMO has this buyer status with all core suppliers. The company also has strong pricing power. According to the company: And in a given year, we would get 50 to 100 basis points of price every year. And that's part of our economic formula in terms of high single-digit organic growth and you say you're getting 0.75 point on price. So that's the norm.
|TMO||US Life Sciences||US Market|
Return vs Industry: TMO exceeded the US Life Sciences industry which returned -32% over the past year.
Return vs Market: TMO exceeded the US Market which returned -23.2% over the past year.
|TMO Average Weekly Movement||4.1%|
|Life Sciences Industry Average Movement||9.7%|
|Market Average Movement||6.8%|
|10% most volatile stocks in US Market||15.5%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: TMO is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.
Volatility Over Time: TMO's weekly volatility (4%) has been stable over the past year.
About the Company
Thermo Fisher Scientific Inc. offers life sciences solutions, analytical instruments, specialty diagnostics, and laboratory products and service worldwide. The company’s Life Sciences Solutions segment offers reagents, instruments, and consumables for biological and medical research, discovery, and production of drugs and vaccines, as well as diagnosis of infections and diseases to pharmaceutical, biotechnology, agricultural, clinical, healthcare, academic, and government markets. Its Analytical Instruments segment provides instruments, consumables, software, and services for use in laboratory, on production line, and in field for pharmaceutical, biotechnology, academic, government, environmental, and other research and industrial markets, as well as clinical laboratories.
Thermo Fisher Scientific Fundamentals Summary
|TMO fundamental statistics|
Is TMO overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|TMO income statement (TTM)|
|Cost of Revenue||US$22.84b|
Last Reported Earnings
Jul 02, 2022
Next Earnings Date
|Earnings per share (EPS)||18.99|
|Net Profit Margin||17.37%|
How did TMO perform over the long term?See historical performance and comparison
0.2%Current Dividend Yield
Is TMO undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 5/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for TMO?
Other financial metrics that can be useful for relative valuation.
|What is TMO's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does TMO's PE Ratio compare to its peers?
|TMO PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
A Agilent Technologies
IQV IQVIA Holdings
MTD Mettler-Toledo International
TMO Thermo Fisher Scientific
Price-To-Earnings vs Peers: TMO is good value based on its Price-To-Earnings Ratio (27.5x) compared to the peer average (30.2x).
Price to Earnings Ratio vs Industry
How does TMO's PE Ratio compare vs other companies in the US Life Sciences Industry?
Price-To-Earnings vs Industry: TMO is expensive based on its Price-To-Earnings Ratio (27.5x) compared to the US Life Sciences industry average (23.2x)
Price to Earnings Ratio vs Fair Ratio
What is TMO's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PE Ratio||27.5x|
|Fair PE Ratio||30.5x|
Price-To-Earnings vs Fair Ratio: TMO is good value based on its Price-To-Earnings Ratio (27.5x) compared to the estimated Fair Price-To-Earnings Ratio (30.5x).
Share Price vs Fair Value
What is the Fair Price of TMO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: TMO ($522.93) is trading below our estimate of fair value ($957.39)
Significantly Below Fair Value: TMO is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.
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How is Thermo Fisher Scientific forecast to perform in the next 1 to 3 years based on estimates from 22 analysts?
Future Growth Score2/6
Future Growth Score 2/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: TMO's forecast earnings growth (11.1% per year) is above the savings rate (1.9%).
Earnings vs Market: TMO's earnings (11.1% per year) are forecast to grow slower than the US market (14.8% per year).
High Growth Earnings: TMO's earnings are forecast to grow, but not significantly.
Revenue vs Market: TMO's revenue (5.1% per year) is forecast to grow slower than the US market (7.7% per year).
High Growth Revenue: TMO's revenue (5.1% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: TMO's Return on Equity is forecast to be high in 3 years time (20.8%)
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How has Thermo Fisher Scientific performed over the past 5 years?
Past Performance Score2/6
Past Performance Score 2/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: TMO has high quality earnings.
Growing Profit Margin: TMO's current net profit margins (17.4%) are lower than last year (22.5%).
Past Earnings Growth Analysis
Earnings Trend: TMO's earnings have grown significantly by 30.3% per year over the past 5 years.
Accelerating Growth: TMO's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.
Earnings vs Industry: TMO had negative earnings growth (-13.4%) over the past year, making it difficult to compare to the Life Sciences industry average (15.6%).
Return on Equity
High ROE: TMO's Return on Equity (17.5%) is considered low.
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How is Thermo Fisher Scientific's financial position?
Financial Health Score4/6
Financial Health Score 4/6
Short Term Liabilities
Long Term Liabilities
Financial Position Analysis
Short Term Liabilities: TMO's short term assets ($18.1B) exceed its short term liabilities ($11.0B).
Long Term Liabilities: TMO's short term assets ($18.1B) do not cover its long term liabilities ($37.1B).
Debt to Equity History and Analysis
Debt Level: TMO's net debt to equity ratio (66.8%) is considered high.
Reducing Debt: TMO's debt to equity ratio has reduced from 75.8% to 71.2% over the past 5 years.
Debt Coverage: TMO's debt is well covered by operating cash flow (29.2%).
Interest Coverage: TMO's interest payments on its debt are well covered by EBIT (19.4x coverage).
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What is Thermo Fisher Scientific current dividend yield, its reliability and sustainability?
Dividend Score 0/6
Cash Flow Coverage
Current Dividend Yield
Dividend Yield vs Market
|Thermo Fisher Scientific Dividend Yield vs Market|
|Company (Thermo Fisher Scientific)||0.2%|
|Market Bottom 25% (US)||1.6%|
|Market Top 25% (US)||4.6%|
|Industry Average (Life Sciences)||0.3%|
|Analyst forecast in 3 Years (Thermo Fisher Scientific)||0.2%|
Notable Dividend: TMO's dividend (0.23%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.67%).
High Dividend: TMO's dividend (0.23%) is low compared to the top 25% of dividend payers in the US market (4.75%).
Stability and Growth of Payments
Stable Dividend: TMO is not paying a notable dividend for the US market, therefore no need to check if payments are stable.
Growing Dividend: TMO is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.
Earnings Payout to Shareholders
Earnings Coverage: TMO is not paying a notable dividend for the US market.
Cash Payout to Shareholders
Cash Flow Coverage: TMO is not paying a notable dividend for the US market.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Marc Casper (54 yo)
Mr. Marc N. Casper has been the Chief Executive Officer and President of Thermo Fisher Scientific, Inc. since October 15, 2009 and has been its Chairman of the Board of Directors since February 26, 2020. M...
CEO Compensation Analysis
|Marc Casper's Compensation vs Thermo Fisher Scientific Earnings|
|Date||Total Comp.||Salary||Company Earnings|
|Jul 02 2022||n/a||n/a|
|Apr 02 2022||n/a||n/a|
|Dec 31 2021||US$21m||US$2m|
|Oct 02 2021||n/a||n/a|
|Jul 03 2021||n/a||n/a|
|Apr 03 2021||n/a||n/a|
|Dec 31 2020||US$26m||US$2m|
|Sep 26 2020||n/a||n/a|
|Jun 27 2020||n/a||n/a|
|Mar 28 2020||n/a||n/a|
|Dec 31 2019||US$19m||US$2m|
|Sep 28 2019||n/a||n/a|
|Jun 29 2019||n/a||n/a|
|Mar 30 2019||n/a||n/a|
|Dec 31 2018||US$19m||US$1m|
|Sep 29 2018||n/a||n/a|
|Jun 30 2018||n/a||n/a|
|Mar 31 2018||n/a||n/a|
|Dec 31 2017||US$22m||US$1m|
|Sep 30 2017||n/a||n/a|
|Jul 01 2017||n/a||n/a|
|Apr 01 2017||n/a||n/a|
|Dec 31 2016||US$18m||US$1m|
|Oct 01 2016||n/a||n/a|
|Jul 02 2016||n/a||n/a|
|Apr 02 2016||n/a||n/a|
|Dec 31 2015||US$16m||US$1m|
Compensation vs Market: Marc's total compensation ($USD21.23M) is above average for companies of similar size in the US market ($USD13.04M).
Compensation vs Earnings: Marc's compensation has been consistent with company performance over the past year.
Experienced Management: TMO's management team is considered experienced (2.9 years average tenure).
Experienced Board: TMO's board of directors are seasoned and experienced ( 11.8 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: TMO insiders have only sold shares in the past 3 months.
Recent Insider Transactions
|01 Aug 22||SellUS$486,156||Jim Manzi||Individual||814||US$597.98|
|02 May 22||SellUS$108,872||Debora Spar||Individual||200||US$544.36|
|01 Mar 22||SellUS$3,301,890||Michel Lagarde||Individual||6,100||US$541.52|
|14 Feb 22||SellUS$845,925||Jim Manzi||Individual||1,500||US$563.95|
|Owner Type||Number of Shares||Ownership Percentage|
|State or Government||175,751||0.04%|
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
Thermo Fisher Scientific Inc.'s employee growth, exchange listings and data sources
- Name: Thermo Fisher Scientific Inc.
- Ticker: TMO
- Exchange: NYSE
- Founded: 1956
- Industry: Life Sciences Tools and Services
- Sector: Pharmaceuticals & Biotech
- Implied Market Cap: US$204.878b
- Shares outstanding: 391.79m
- Website: https://www.thermofisher.com
Number of Employees
- Thermo Fisher Scientific Inc.
- 168 Third Avenue
- United States
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|TMO||NYSE (New York Stock Exchange)||Yes||Common Stock||US||USD||Jan 1980|
|TN8||DB (Deutsche Boerse AG)||Yes||Common Stock||DE||EUR||Jan 1980|
|TN8||XTRA (XETRA Trading Platform)||Yes||Common Stock||DE||EUR||Jan 1980|
|TMO *||BMV (Bolsa Mexicana de Valores)||Yes||Common Stock||MX||MXN||Jan 1980|
|0R0H||LSE (London Stock Exchange)||Yes||Common Stock||GB||USD||Jan 1980|
|TN8||ETLX (Eurotlx)||Yes||Common Stock||IT||EUR||Jan 1980|
|TMOF||WBAG (Wiener Boerse AG)||Yes||Common Stock||AT||EUR||Jan 1980|
|TMO||BVL (Bolsa de Valores de Lima)||Yes||Common Stock||PE||USD||Jan 1980|
|TMOS34||BOVESPA (Bolsa de Valores de Sao Paulo)||BDR EACH 48 REP 1 COM||BR||BRL||Apr 2016|
|TMO||BASE (Buenos Aires Stock Exchange)||CEDEAR EACH 22 REP 1||AR||ARS||Apr 2019|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/10/03 00:00|
|End of Day Share Price||2022/10/03 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.