Cooper Companies (The)

Methodology

Cooper Companies' medical device business generates predictable earnings through consumable contact lenses and fertility products, making earnings-based valuation reliable. The recurring revenue model from daily disposable contacts provides stability similar to subscription businesses. Fair value calculations work well when accounting for steady mid-single-digit organic growth rates.

Methodology

Cooper typically trades at PEG ratios between 1.5-2.5x, reflecting premium valuations for its duopoly position in contact lenses alongside Johnson & Johnson. The company's fertility business adds diversification and higher growth potential. PEG works well here given consistent growth and limited cyclicality in vision correction demand.

Methodology

Cooper pays a modest dividend yielding under 0.5%, making PEGY nearly identical to PEG for valuation purposes. Management prioritizes reinvestment in manufacturing capacity and product innovation over dividend increases. The total return story centers on compounding growth rather than income generation.