Financial Contrast: Thermo Fisher Scientific (NYSE:TMO) and Fresenius Medical Care AG & Co. KGaA (NYSE:FMS)

Fresenius Medical Care AG & Co. KGaA (NYSE:FMS) and Thermo Fisher Scientific (NYSE:TMO) are both medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, risk, valuation, dividends, earnings, profitability and institutional ownership.

Dividends

Fresenius Medical Care AG & Co. KGaA pays an annual dividend of $0.57 per share and has a dividend yield of 2.5%. Thermo Fisher Scientific pays an annual dividend of $1.72 per share and has a dividend yield of 0.3%. Fresenius Medical Care AG & Co. KGaA pays out 41.6% of its earnings in the form of a dividend. Thermo Fisher Scientific pays out 9.9% 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. Thermo Fisher Scientific has raised its dividend for 8 consecutive years.

Institutional & Insider Ownership

8.4% of Fresenius Medical Care AG & Co. KGaA shares are owned by institutional investors. Comparatively, 89.2% of Thermo Fisher Scientific shares are owned by institutional investors. 0.3% of Thermo Fisher Scientific shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Fresenius Medical Care AG & Co. KGaA has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500. Comparatively, Thermo Fisher Scientific has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500.

Profitability

This table compares Fresenius Medical Care AG & Co. KGaA and Thermo Fisher Scientific’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fresenius Medical Care AG & Co. KGaA	3.72%	7.42%	3.43%
Thermo Fisher Scientific	15.05%	16.92%	8.36%

Valuation & Earnings

This table compares Fresenius Medical Care AG & Co. KGaA and Thermo Fisher Scientific”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fresenius Medical Care AG & Co. KGaA	$20.63 billion	N/A	$582.08 million	$1.37	16.55
Thermo Fisher Scientific	$44.56 billion	4.88	$6.34 billion	$17.31	33.40

Thermo Fisher Scientific has higher revenue and earnings than Fresenius Medical Care AG & Co. KGaA. Fresenius Medical Care AG & Co. KGaA is trading at a lower price-to-earnings ratio than Thermo Fisher Scientific, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Fresenius Medical Care AG & Co. KGaA and Thermo Fisher Scientific, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fresenius Medical Care AG & Co. KGaA	3	4	0	0	1.57
Thermo Fisher Scientific	0	3	18	1	2.91

Fresenius Medical Care AG & Co. KGaA presently has a consensus price target of $28.00, suggesting a potential upside of 23.51%. Thermo Fisher Scientific has a consensus price target of $633.68, suggesting a potential upside of 9.60%. Given Fresenius Medical Care AG & Co. KGaA’s higher possible upside, equities analysts clearly believe Fresenius Medical Care AG & Co. KGaA is more favorable than Thermo Fisher Scientific.

Summary

Thermo Fisher Scientific beats Fresenius Medical Care AG & Co. KGaA on 15 of the 17 factors compared between the two stocks.

About Fresenius Medical Care AG & Co. KGaA

Fresenius Medical Care AG provides dialysis and related services for individuals with renal diseases in Germany, North America, and internationally. The company offers dialysis treatment and related laboratory and diagnostic services through a network of outpatient dialysis clinics; materials, training, and patient support services comprising clinical monitoring, follow-up assistance, and arranging for delivery of the supplies to the patient's residence; and dialysis services under contract to hospitals in the United States for the hospitalized end-stage renal disease (ESRD) patients and for patients suffering from acute kidney failure. It also develops, manufactures, and distributes various health care products, including polysulfone dialyzers, hemodialysis machines, peritoneal dialysis cyclers, peritoneal dialysis solutions, hemodialysis concentrates, solutions and granulates, bloodlines, renal pharmaceuticals, systems for water treatment, and acute cardiopulmonary and apheresis products. In addition, the company develops, acquires, and in-licenses renal pharmaceuticals; offers renal medications and supplies to patients at homes or to dialysis clinics; and provides vascular, cardiovascular, endovascular specialty, vascular care ambulatory surgery center, and physician nephrology and cardiology services. The company sells its products to dialysis clinics, hospitals, and specialized treatment clinics directly, as well as through local sales forces, independent distributors, dealers, and sales agents. Fresenius Medical Care AG was incorporated in 1996 and is headquartered in Bad Homburg, Germany.

About Thermo Fisher Scientific

Thermo Fisher Scientific Inc. provides life sciences solutions, analytical instruments, specialty diagnostics, and laboratory products and biopharma services in the North America, Europe, Asia-Pacific, and internationally. 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; and solutions include biosciences, genetic sciences, and bio production to pharmaceutical, biotechnology, agricultural, clinical, healthcare, academic, and government markets. Its Analytical Instruments segment provides instruments, consumables, software, and services for pharmaceutical, biotechnology, academic, government, environmental, and other research and industrial markets, as well as clinical laboratories. The company's Specialty Diagnostics segment offers liquid, ready-to-use, and lyophilized immunodiagnostic reagent kits, as well as calibrators, controls, protein detection assays, and instruments; immunodiagnostics develops, manufactures and markets complete bloodtest systems to support the clinical diagnosis and monitoring of allergy, asthma and autoimmune diseases; dehydrated and prepared culture media, collection and transport systems, instrumentation, and consumables; human leukocyte antigen typing and testing for organ transplant market; and healthcare products. Its Laboratory Products and Biopharma Services segment provides laboratory products, research and safety market channel, and pharma services and clinical research. It offers products and services through a direct sales force, customer-service professionals, electronic commerce, and third-party distributors under Thermo Scientific; Applied Biosystems; Invitrogen; Fisher Scientific; Unity Lab Services; and Patheon and PPD. Thermo Fisher Scientific Inc. was founded in 1956 and is headquartered in Waltham, Massachusetts.