Emerson Electric (EMR) versus Its Rivals Financial Analysis

Emerson Electric (NYSE: EMR) is one of 46 public companies in the “Electrical Components & Equipment” industry, but how does it contrast to its competitors? We will compare Emerson Electric to related businesses based on the strength of its earnings, dividends, institutional ownership, profitability, risk, valuation and analyst recommendations.

Insider & Institutional Ownership

70.0% of Emerson Electric shares are held by institutional investors. Comparatively, 66.5% of shares of all “Electrical Components & Equipment” companies are held by institutional investors. 0.8% of Emerson Electric shares are held by insiders. Comparatively, 6.4% of shares of all “Electrical Components & Equipment” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Emerson Electric and its competitors revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Emerson Electric $14.76 billion $3.18 billion 27.71
Emerson Electric Competitors $1.91 billion $302.41 million -35.00

Emerson Electric has higher revenue and earnings than its competitors. Emerson Electric is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Emerson Electric and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Emerson Electric 8.89% 22.32% 9.25%
Emerson Electric Competitors -3.11% 5.25% 2.19%

Risk and Volatility

Emerson Electric has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500. Comparatively, Emerson Electric’s competitors have a beta of 1.29, meaning that their average stock price is 29% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Emerson Electric and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Emerson Electric 1 10 3 0 2.14
Emerson Electric Competitors 256 1039 1229 13 2.39

Emerson Electric presently has a consensus target price of $61.44, indicating a potential downside of 1.45%. As a group, “Electrical Components & Equipment” companies have a potential upside of 5.78%. Given Emerson Electric’s competitors stronger consensus rating and higher probable upside, analysts clearly believe Emerson Electric has less favorable growth aspects than its competitors.

Dividends

Emerson Electric pays an annual dividend of $1.92 per share and has a dividend yield of 3.1%. Emerson Electric pays out 85.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Electrical Components & Equipment” companies pay a dividend yield of 1.6% and pay out 45.5% of their earnings in the form of a dividend. Emerson Electric has increased its dividend for 60 consecutive years.

Summary

Emerson Electric beats its competitors on 8 of the 15 factors compared.

Emerson Electric Company Profile

Emerson Electric Co. is a diversified global manufacturing company, which provides solutions to customers by bringing technology and engineering together in the industrial, commercial and consumer markets around the world. The Company operates through four segments based on the nature of the products and services rendered: Process Management, Industrial Automation, Climate Technologies and Commercial & Residential Solutions. The Company’s principal production operations are electronics assembly, metal stamping, forming, casting, machining, welding, plating, heat treating, painting and assembly. In addition, the Company uses specialized production operations, including automatic and semiautomatic testing, automated material handling and storage, ferrous and nonferrous machining, and special furnaces for heat treating and foundry applications. The Company provides measurement, control and diagnostic technologies for automated industrial processes.

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