Thermo Fisher Scientific Inc. (TMO) vs Verizon Communications Inc. (VZ): Which Is the Better Buy in 2026?
As of 2026-06-19, TMO is overvalued at $465, with a DCF intrinsic value of $407 and a margin of safety of -14%. VZ is overvalued at $45, with an intrinsic value of $40 and a margin of safety of -14%. Of the two, VZ has the wider margin of safety.
Rewards
- ★Trailing P/E of 25.5x is 21% below the historical average of 32.3x — potentially undervalued relative to its own history.
- ★Altman Z-Score of 3.85 indicates very low bankruptcy risk — the company is firmly in the safe zone.
- ★Free cash flow has grown at a 23.7% CAGR over the past 4 years, demonstrating strong earnings power growth.
- ★FCF yield of 10.4% is historically attractive — the business generates significant cash relative to its price.
- ★PEG ratio of 0.88 suggests the stock is undervalued relative to its growth rate — paying less than 1x for each unit of earnings growth.
Risks
- ⚠21 insider sales with no purchases over the past 12 months — a persistent pattern of insider selling.
- ⚠High leverage (1.84x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.
- ⚠Altman Z-Score of 1.24 places the company in the distress zone — financial patterns resemble those of companies that experienced bankruptcy.
- ⚠Insiders have sold $3.5M worth of stock in the past 3 months — significant insider liquidation.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
$1 Retained Earnings Test
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Discounted Cash Flow (DCF) Analysis
Learn more →Reverse DCF — Market-Implied Growth
Learn more →What growth rate is the market pricing in at $465?
The market implies +11.6% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +16.6%, reflecting heavy growth investment.
What growth rate is the market pricing in at $45?
The market implies +8.5% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +7.3%, reflecting heavy growth investment.
Economic Moat Score
Learn more →Narrow moat with margin stability as the key competitive advantage. Improving roic consistency would strengthen the moat.
Narrow moat with margin stability as the key competitive advantage. Improving roic consistency would strengthen the moat.
Forensic Accounting
Learn more →M-Score Trend
M-Score Trend
Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is pessimistic — investigate whether fears are temporary or structural"
"Market is pricing this stock without strong emotion in either direction"
Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
⚖️ Buffett Signal
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: TMO vs VZ
Is Thermo Fisher Scientific Inc. or Verizon Communications Inc. more undervalued in 2026?▼
Based on our discounted cash flow model, VZ trades at a -13.8% margin of safety (intrinsic value $40 vs. price $45), compared to TMO's -14.3% margin of safety (intrinsic $407 vs. $465).
Which stock has a wider economic moat, Thermo Fisher Scientific Inc. or Verizon Communications Inc.?▼
TMO scores 60/100 (Narrow moat), while VZ scores 55/100 (Narrow moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Is Verizon Communications Inc. in financial distress?▼
VZ's Altman Z-Score of 1.2 places it in the Distress zone, signaling elevated bankruptcy risk. TMO scores 3.9 (Safe zone). The Altman Z-Score is a five-factor model that predicts insolvency within two years; scores below 1.81 indicate significant distress.
Which company has better free cash flow, Thermo Fisher Scientific Inc. or Verizon Communications Inc.?▼
Verizon Communications Inc. (VZ) generates a 10.4% free cash flow yield, compared to Thermo Fisher Scientific Inc.'s 3.2%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.
Which stock has higher return on invested capital, Thermo Fisher Scientific Inc. or Verizon Communications Inc.?▼
VZ earns 9.1% ROIC versus TMO's 6.7%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.
Which dividend is safer, Thermo Fisher Scientific Inc.'s or Verizon Communications Inc.'s?▼
TMO's dividend earns a safety score of 94/100 (Very Safe), compared to VZ's 84/100 (Very Safe). TMO has raised its dividend for 3 consecutive years.