Danaher Corporation (DHR): investment thesis checklist
What a value investor writing down why they own Danaher Corporation would be relying on, read from its filings: the figures that have carried the business, the lines a reader might set on them, and the published tests it meets today. A list to write against, not a view on the company.
1. The figures the case would rest on
- Return on invested capital: 5.9% in FY2025; between 5.9% and 10.3% over 8 filed years, median 6.6%. Does the thesis need it to stay inside that range?
- Return on equity: 6.9% in FY2025; between 6.9% and 14.4% over 10 filed years, median 9.4%. Does the thesis need it to stay inside that range?
- Free cash flow yield: 3.2% in FY2025; between 3.0% and 5.4% over 10 filed years, median 3.4%. Does the thesis need it to stay inside that range?
- EV to EBIT: 38.17x in FY2025; between 24.95x and 41.54x over 8 filed years, median 36.30x. Does the thesis need it to stay inside that range?
- Price to earnings: 45.33x in FY2025; between 21.32x and 45.42x over 10 filed years, median 35.06x. Does the thesis need it to stay inside that range?
- Gross margin: 59.1% in FY2025; between 46.8% and 61.4% over 10 filed years, median 57.4%. Does the thesis need it to stay inside that range?
- Operating margin: 19.1% in FY2025; between 14.0% and 28.3% over 10 filed years, median 19.0%. Does the thesis need it to stay inside that range?
- Net debt to EBITDA: 2.77x in FY2025; between 0.59x and 2.77x over 8 filed years, median 2.28x. Does the thesis need it to stay inside that range?
- Revenue growth, 5-year CAGR: 2.0% in FY2025; between -2.1% and 9.1% over 10 filed years, median 2.9%. Does the thesis need it to stay inside that range?
- Share count change: -2.9% in FY2025; between -9.1% and 2.1% over 9 filed years, median 0.0%. Does the thesis need it to stay inside that range?
2. What must stay true: guardrails a reader might set
Each line is drafted from Danaher Corporation's own current figure, never from a level we think a business should clear, and replayed over its filed years. They are a reader's to keep, edit or drop.
Debt to Equity stays at or below 0.46x
Today 0.37x. Replayed over 8 filed years, it would have broken in 3; most recently FY2021, at 0.52x (10-K, filed 2022-02-23).
Return on Invested Capital stays at or above 4.72%
Today 5.9%. This indicator depends on inputs (market price, multi-statement composites) whose history is not deep enough to re-derive it with the same formula as the live value, so no honest retro-test exists for it.
Dividend Rate stays at or above $1.58
Today $1.60. This indicator depends on inputs (market price, multi-statement composites) whose history is not deep enough to re-derive it with the same formula as the live value, so no honest retro-test exists for it.
3. What would break it
- A filed year in which debt to equity rose above 0.46x.
- A filed year in which return on invested capital fell below 4.72%.
- A filed year in which dividend rate fell below $1.58.
4. The published tests it meets today
Of 30 tests value investors published: 2 met, 28 not met, 0 we could not complete. Counts, never a score.
Meets: Z-score and coverage (Edward Altman); Cash-covered dividend.
What this cannot tell you
What the numbers say today, not the day one stops being true. The reasons are not written down.
An account adds
One email the night a number you wrote down breaks. Silence otherwise.
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How this is computedA computation on accounts filed with the SEC, not a recommendation and not advice. Past filings do not indicate future results. Risk disclaimer.