I have decided to retain the shares of “old” Danaher Corp. (NYSE: DHR – $80.40) in the conservative portfolio and have adjusted the “Date Added” price to $33.13 per share to account for the distribution of Fortive Corp. (NYSE: FTV – $49.40) shares effective with today’s opening bid. For each share of the “old” Danaher, stockholders received a half-share of Fortive (or one share of Fortive for each two shares of the “old” Danaher stock). The “new” Danaher priced dropped proportionately in today’s trading to adjust for the distribution, but ended the day $2.98 higher than the opening price of $77.42.
While I believe Fortive Corp. is worthy of retention for those investors receiving the new shares, I am not adding it to the conservative list at this time and will not cover FTV in this blog. Post-division, I believe the business staying under the Danaher name will trade at a higher multiple because of the greater level of recurring revenue and handsome growth rates of its end markets. Fortive should also fetch a premium, due to its acquisitive growth strategy and steady portfolio, but likely not to the same level of DHR, which will retain the Life Sciences and Diagnostic Segment (Beckman-Coulter, Leica Geosystems, the recent Pall acquisition, etc.) and the Dental Segment.