Thermo Fisher Scientific (TMO): The Low Volatility Stock to Buy Now?

Thermo Fisher Scientific Inc. (NYSE:TMO) has long been a favorite among investors seeking low volatility stocks. With a strong balance sheet, diverse product offerings, and a global presence, TMO has consistently demonstrated a low volatility profile. In this article, we will explore the factors that contribute to TMO's low volatility and assess whether it is the best low volatility stock to buy right now.



Consistent Revenue Growth and Stable Earnings

TMO's low volatility can be attributed to its consistent revenue growth and stable earnings. The company has a 10-year revenue compound annual growth rate (CAGR) of 10.32%, reflecting its ability to generate steady revenue growth over the long term. Additionally, TMO's earnings per share (EPS) have been stable, with adjusted EPS of $21.55 in 2023 and a projected range of $21.35 to $22.07 for 2024. This stability in earnings contributes to TMO's low volatility profile.



Strong Balance Sheet and Low Debt-to-Equity Ratio

TMO's strong balance sheet and low debt-to-equity ratio further contribute to its low volatility. As of December 31, 2023, TMO's debt-to-equity ratio was 0.35, indicating a low level of debt relative to its equity. This low debt-to-equity ratio suggests that TMO has a strong financial position and is less vulnerable to economic downturns or market fluctuations compared to companies with higher debt levels.



Diverse Product Offerings and Global Presence

TMO's diverse product portfolio and strong global presence also contribute to its low volatility. The company provides a wide range of products and services in life sciences solutions, analytical instruments, specialty diagnostics, and laboratory products, catering to various markets and customer needs. Additionally, TMO's global presence helps mitigate risks associated with regional economic fluctuations and regulatory changes.



Analyst Recommendations and Valuation

Analysts have a positive outlook on TMO, with 29 out of 30 analysts having a "buy" or "hold" rating for the stock. TMO's P/E ratio is 32.57545, which is relatively low compared to its peers in the healthcare sector, indicating that the market expects TMO's earnings to grow at a consistent and predictable rate.



Conclusion

Thermo Fisher Scientific Inc. (TMO) has consistently demonstrated a low volatility profile, driven by its consistent revenue growth, stable earnings, strong balance sheet, diverse product offerings, and global presence. With a positive outlook from analysts and a relatively low P/E ratio, TMO appears to be an attractive investment option for risk-averse investors seeking low volatility stocks. However, as with any investment, it is essential to conduct thorough research and consider your risk tolerance before making a decision.