Agilent Technologies (NYSE:A) is a global leader in manufacturing and developing analytical instruments for use in laboratories and other sectors. Agilent is actually quite a well diversified company that operates in dozens of different industries, although the core product and service line revolves around food, environmental forensics, pharmaceuticals, diagnostics, chemical, and research. As you can see, that is quite the breadth of categories. Agilent was established back in 1999 and actually spun off from Hewlett Packard with the resulting IPO being the largest one out of Silicon Valley at that time. Learn more
Agilent’s stock is not one that often appears on the radar of growth investors, although its 52-week trading range of $88.07 to $148.84 per share indicates a similar chart to many stocks that were hit hard by the COVID-19 pandemic in March of 2020. Since then it has been a nearly direct line to the top right corner of the chart for Agilent, as shares have carried the company to an all-time high market cap of just below $45 billion USD. With so much growth over the past 52-weeks, can Agilent continue this pace moving forward?
Agilent Stock Analysis: To fully understand Agilent’s full product portfolio, it’s probably easier to name the industries that the company does not operate in rather than list all the ones that it does. The parts of Agilent’s profile that get the most headlines? Those include things like cancer research, broader clinical diagnostics, forensics, genomics, environmental, food and agriculture, pathology, and most recently, COVID-19 research.
Agilent’s suite of laboratory analytical machines continue to be its highest revenue stream, bringing in an impressive $674 million in the second quarter of 2021, good enough for 28% year over year growth in that sector alone. The red-hot genomic diagnostics sector was another positive for Agilent, as its Dako and Magnis machines brought in $315 million which is a 20% year over year growth from 2020. The genomics industry is still in its infancy, so shareholders should reasonably expect this to be a rapidly growing part of Agilent’s future success.
Agilent has shown steady impressive growth both domestically and internationally. In its most recent quarter, Agilent saw a well balanced revenue stream with 38% from the Americas, 35% from Asia Pacific, and the remaining 27% from Europe. Its core segments were split into instrument revenues and consumer services, which accounted for 41% and 59% respectively. Moving forward investors want to see a company like Agilent move towards the higher margin services side rather than lower margin manufacturing.
Final Verdict on Agilent: A company that is never discussed as a high growth stock has everything needed to be a multibagger in the future. Agilent has a strong industry moat and provides nearly irreplaceable services and products to companies around the world. With a market cap of only $45 billion, it is not inconceivable that the company could grow exponentially as the pace of scientific lab research increases. Throw in a small but not insignificant dividend, and Agilent is one of those stocks that can just continue to compound in your portfolio for decades.