Given their similar market capitalization, IDEXX Laboratories (NASDAQ: IDXX) is a better choice over Kimberly-Clark (NYSE: KMB). While these companies operate in different sectors, comparing certain characteristics can help determine the best investment option. In terms of profitability, IDEXX Laboratories has a higher Sharpe ratio compared to Kimberly-Clark. Additionally, IDXX has seen better stock returns, with 12% gains this year, while KMB stock has declined by 8%. Furthermore, IDEXX has a stronger revenue growth rate, with 12% average annual growth in the last three years, while Kimberly-Clark’s growth rate stands at 3%. IDEXX is also more profitable, with a higher operating margin and a better financial position. Based on these factors, IDEXX is expected to provide better returns in the next three years.
1. IDEXX’s Revenue Growth Is Better:
– IDEXX has experienced a 12% average annual growth rate in the last three years, while Kimberly-Clark’s growth rate is only 3%.
– IDEXX’s revenue growth is supported by increased pet ownership and the launch of new products, such as the ProCyte hematology analyzer, which provides quick blood results.
– In contrast, Kimberly-Clark’s revenue is driven by its personal care segment, which accounts for 53% of its sales.
2. IDEXX Is More Profitable:
– IDEXX has a higher operating margin compared to Kimberly-Clark, with 29.9% versus 11.0%.
– IDEXX also has a better financial position, with lower debt and higher cash reserves.
3. The Net of It All:
– IDEXX has superior revenue growth, higher profitability, and a stronger financial position, resulting in a higher P/S ratio compared to Kimberly-Clark.
– Using P/S as a base for comparison, IDEXX is expected to offer better returns in the next three years.
– IDEXX’s stock valuation multiples are slightly better compared to historical averages, with a P/S ratio of 11x versus its five-year average of 13x, while Kimberly-Clark has a P/S ratio of 2.1x versus its five-year average of 2.4x.
– Based on Trefis Machine Learning analysis, IDEXX is projected to have a 24% gain, while Kimberly-Clark is expected to have a 10% return in the next three years.
Overall, IDEXX Laboratories is projected to outperform Kimberly-Clark in the coming years. For more in-depth information on these companies, you can refer to the provided links to their revenue comparisons, operating income comparisons, and valuation ratios.
Note: The author’s views and opinions expressed in this article do not represent those of Nasdaq, Inc.