Analyzing Emerson Electric (EMR) & AMTEK (AME)

Emerson Electric (NYSE: EMR) and AMTEK (NYSE:AME) are both large-cap industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Risk and Volatility

Emerson Electric has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500. Comparatively, AMTEK has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500.

Profitability

This table compares Emerson Electric and AMTEK’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Emerson Electric 9.94% 20.47% 9.05%
AMTEK 13.37% 16.48% 7.77%

Institutional & Insider Ownership

69.0% of Emerson Electric shares are owned by institutional investors. Comparatively, 84.3% of AMTEK shares are owned by institutional investors. 0.8% of Emerson Electric shares are owned by company insiders. Comparatively, 2.1% of AMTEK shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Emerson Electric and AMTEK’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Emerson Electric $15.26 billion 2.77 $1.52 billion $2.56 25.70
AMTEK $3.84 billion 4.30 $512.15 million $2.38 30.00

Emerson Electric has higher revenue and earnings than AMTEK. Emerson Electric is trading at a lower price-to-earnings ratio than AMTEK, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations for Emerson Electric and AMTEK, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Emerson Electric 2 10 4 0 2.13
AMTEK 0 1 8 0 2.89

Emerson Electric presently has a consensus price target of $66.17, suggesting a potential upside of 0.59%. AMTEK has a consensus price target of $71.33, suggesting a potential downside of 0.09%. Given Emerson Electric’s higher probable upside, equities research analysts clearly believe Emerson Electric is more favorable than AMTEK.

Dividends

Emerson Electric pays an annual dividend of $1.94 per share and has a dividend yield of 2.9%. AMTEK pays an annual dividend of $0.36 per share and has a dividend yield of 0.5%. Emerson Electric pays out 75.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AMTEK pays out 15.1% of its earnings in the form of a dividend. AMTEK has increased its dividend for 60 consecutive years.

Summary

AMTEK beats Emerson Electric on 10 of the 17 factors compared between the two stocks.

About Emerson Electric

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.

About AMTEK

AMETEK, Inc. is a manufacturer of electronic instruments and electromechanical devices with operations in North America, Europe, Asia and South America. The Company operates through two segments: Electronic Instruments (EIG) and Electromechanical (EMG). EIG designs and manufactures instruments for the process, power and industrial and aerospace markets. EIG provides process and analytical instruments for the oil, gas, petrochemical, pharmaceutical, semiconductor and automation markets. It makes monitoring and metering devices, industrial battery chargers and uninterruptible power supplies, programmable power equipment, electrical test equipment and gas turbine sensors. EMG is a differentiated supplier of precision motion control solutions, thermal management systems, specialty metals and electrical interconnects. Its end markets include medical, automation, petrochemical and other industrial markets. It operates a network of aviation maintenance, repair and overhaul (MRO) facilities.

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