Veralto

Methodology

Veralto's fair value calculation works well given the company's consistent earnings growth driven by water quality and product identification technologies with recurring revenue characteristics. The method captures Veralto's position as a high-quality industrial compounder with predictable demand across municipal water, industrial process, and food safety end markets. Fair value estimates are reliable because the business model emphasizes consumables, software, and service revenue that provide earnings stability and visibility.

Methodology

Veralto typically commands moderate to premium PEG ratios reflecting its exposure to secular trends in water quality, environmental compliance, and traceability requirements that drive steady demand. The PEG framework works well for Veralto because growth rates are predictable and supported by recurring revenue, though investors should normalize for the company's recent spinoff from Danaher. Comparing Veralto's PEG to other diversified industrial technology companies provides context for relative valuation.

Methodology

Veralto pays a minimal dividend as a newly independent company, with management prioritizing reinvesting in R&D, commercial expansion, and strategic M&A to build the platform. PEGY therefore provides little incremental insight beyond PEG, as the yield component is not meaningful. For Veralto investors, evaluating recurring revenue growth, geographic expansion, and new product adoption matters far more than the modest dividend yield.