12 Best Diagnostics Stocks to Invest In Right Now

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1. Danaher Corporation (NYSE:DHR)

Number of Hedge Fund Holders: 101

Danaher Corporation (NYSE:DHR) designs, manufactures, and markets professional, medical, industrial, and commercial products and services, making it a significant diagnostics stock. It operates through Diagnostics, Biotechnology, Life Sciences, and Environmental and Applied Solutions. Its Biotechnology segment offers a range of equipment and consumables for biological medicines, while the Life Diagnostics segment offers clinical instruments, devices, consumables, and other services for the diagnosis and treatment of diseases.

Strong free cash flow generation is a competitive point for the company, as it generated $5.3 billion of free cash flow in fiscal 2024. This resulted in a free cash flow to net income conversion ratio of around 135%. Danaher Corporation (NYSE:DHR) is also active in the M&A domain, completing several strategic acquisitions throughout fiscal 2024 that brought innovative solutions to the company.

Danaher Corporation’s (NYSE:DHR) focus on high-margin bioprocessing in its life sciences sector is central to its growth strategy. The anticipated recovery in bioprocessing is expected to significantly increase the company’s earnings per share (EPS) in the coming years.

On March 21, Goldman Sachs upgraded Danaher Corporation (NYSE:DHR) to Buy from Neutral with a $260 price target. Madison Sustainable Equity Fund was also bullish on the company, and stated the following regarding Danaher Corporation (NYSE:DHR) in its Q3 2024 investor letter:

“Danaher Corporation (NYSE:DHR) released its 2024 Corporate Sustainability Report. It highlighted several milestones across its three pillars of sustainability (building the best team, innovating products that improve lives and the planet, and protecting the environment). The company has committed to setting greenhouse gas emission reduction targets in line with the Science Based Targets initiatives (SBTi), including reaching net-zero value chain emissions by 2050.”

Overall, DHR ranks first among the 12 best diagnostics stocks to invest in right now. While we acknowledge the potential of diagnostics stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DHR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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