Given its better prospects, we believe that IDEXX Laboratories stock (NASDAQ
NDAQ
: IDXX) is a better pick over Kimberly-Clark stock (NYSE: KMB). Although these companies are from different sectors, we compare them because they have a similar market capitalization of around $40 billion. The decision to invest often comes down to finding the best stocks within the parameters of certain characteristics that suit an investment style. The size of profits can matter, as larger profits can imply greater market power. Since these stocks are from different sectors, comparing P/S against one another may not be helpful. We compare their current multiples with the historical ones in the sections below to better gauge their valuations.
Interestingly, IDXX has had a Sharpe Ratio of 0.6 since early 2017, aligning with the 0.6 figure for the S&P 500 Index over the same period, but Kimberly-Clark’s
KMB
Sharpe ratio of 0.0 is much lower. This compares with the Sharpe of 1.3 for the Trefis Reinforced Value portfolio. Sharpe is a measure of return per unit of risk, and high-performance portfolios can provide the best of both worlds.
Subscribe
Gain access to all our Premium contents.
More than 100+ articles.
Buy Article
Unlock this article and gain permanent access to read it.