NYSE:EMR

Stock Analysis Report

Executive Summary

Emerson Electric Co., a technology and engineering company, provides solutions to industrial, commercial, and consumer markets worldwide.


Snowflake Analysis

Established dividend payer with adequate balance sheet.


Similar Companies

Share Price & News

How has Emerson Electric's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: EMR has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.9%

EMR

-0.1%

US Electrical

-1.1%

US Market


1 Year Return

5.2%

EMR

12.7%

US Electrical

17.9%

US Market

Return vs Industry: EMR underperformed the US Electrical industry which returned 12.7% over the past year.

Return vs Market: EMR underperformed the US Market which returned 17.9% over the past year.


Shareholder returns

EMRIndustryMarket
7 Day-1.9%-0.1%-1.1%
30 Day-7.1%1.1%1.4%
90 Day-2.1%4.5%6.9%
1 Year8.3%5.2%15.0%12.7%20.3%17.9%
3 Year30.2%19.2%35.5%27.7%47.8%38.3%
5 Year46.2%24.5%50.6%35.6%71.9%53.0%

Price Volatility Vs. Market

How volatile is Emerson Electric's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Emerson Electric undervalued compared to its fair value and its price relative to the market?

20.38x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: EMR ($72.09) is trading above our estimate of fair value ($68.37)

Significantly Below Fair Value: EMR is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: EMR is good value based on its PE Ratio (20.4x) compared to the Electrical industry average (21.1x).

PE vs Market: EMR is poor value based on its PE Ratio (20.4x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: EMR is poor value based on its PEG Ratio (2.2x)


Price to Book Ratio

PB vs Industry: EMR is overvalued based on its PB Ratio (5.2x) compared to the US Electrical industry average (1.8x).


Next Steps

Future Growth

How is Emerson Electric forecast to perform in the next 1 to 3 years based on estimates from 21 analysts?

9.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: EMR's forecast earnings growth (9.3% per year) is above the savings rate (1.7%).

Earnings vs Market: EMR's earnings (9.3% per year) are forecast to grow slower than the US market (14.1% per year).

High Growth Earnings: EMR's earnings are forecast to grow, but not significantly.

Revenue vs Market: EMR's revenue (3.6% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: EMR's revenue (3.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: EMR's Return on Equity is forecast to be high in 3 years time (30.6%)


Next Steps

Past Performance

How has Emerson Electric performed over the past 5 years?

-0.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: EMR has high quality earnings.

Growing Profit Margin: EMR's current net profit margins (11.8%) are lower than last year (12.8%).


Past Earnings Growth Analysis

Earnings Trend: EMR's earnings have declined by -0.5% per year over the past 5 years.

Accelerating Growth: EMR's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: EMR had negative earnings growth (-4.8%) over the past year, making it difficult to compare to the Electrical industry average (0.6%).


Return on Equity

High ROE: EMR's Return on Equity (25.9%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Emerson Electric's financial position?


Financial Position Analysis

Short Term Liabilities: EMR's short term assets ($7.2B) exceed its short term liabilities ($6.3B).

Long Term Liabilities: EMR's short term assets ($7.2B) exceed its long term liabilities ($6.3B).


Debt to Equity History and Analysis

Debt Level: EMR's debt to equity ratio (71%) is considered high.

Reducing Debt: EMR's debt to equity ratio has increased from 70.9% to 71% over the past 5 years.

Debt Coverage: EMR's debt is well covered by operating cash flow (51.8%).

Interest Coverage: EMR's interest payments on its debt are well covered by EBIT (18.1x coverage).


Balance Sheet

Inventory Level: EMR has a high level of physical assets or inventory.

Debt Coverage by Assets: EMR's debt is covered by short term assets (assets are 1.2x debt).


Next Steps

Dividend

What is Emerson Electric's current dividend yield, its reliability and sustainability?

2.77%

Current Dividend Yield


Dividend Yield vs Market

company2.8%marketbottom25%1.4%markettop25%3.7%industryaverage2.2%forecastin3Years2.8%

Current dividend yield vs market & industry

Notable Dividend: EMR's dividend (2.77%) is higher than the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: EMR's dividend (2.77%) is low compared to the top 25% of dividend payers in the US market (3.73%).


Stability and Growth of Payments

Stable Dividend: EMR's dividends per share have been stable in the past 10 years.

Growing Dividend: EMR's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (55.7%), EMR's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: EMR's dividends in 3 years are forecast to be well covered by earnings (45.7% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.8yrs

Average management tenure


CEO

David Farr (64yo)

19.3yrs

Tenure

US$20,301,576

Compensation

Mr. David N. Farr serves as the Chairman and Chief Executive Officer in 2004 of Emerson Network Power Co., Ltd. Mr. Farr has been the Chief Executive Officer of Emerson Electric Co. (Emerson) since October ...


CEO Compensation Analysis

Compensation vs Market: David's total compensation ($USD20.30M) is above average for companies of similar size in the US market ($USD10.81M).

Compensation vs Earnings: David's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
David Farr
Chairman & CEO19.3yrsUS$20.30m0.42% $185.4m
Michael Train
President & Chairman of Automation Solutions1.3yrsUS$4.40m0.027% $11.9m
Frank Dellaquila
Senior EVP & CFO10yrsUS$7.14m0.061% $26.8m
Steven Pelch
COO & Executive VP of Organization Planning and Development2.2yrsUS$4.45m0.023% $10.1m
Surendralal Karsanbhai
Executive President of Emerson Automation Solutions0yrsUS$4.59m0.0073% $3.2m
Robert Sharp
Executive President of Commercial & Residential Solutions0yrsUS$3.96m0.022% $9.6m
Michael Baughman
Chief Accounting Officer2yrsno data0.0043% $1.9m
Jake Fritz
Chief Information Officer & VP4.5yrsno datano data
Sara Bosco
Senior VP3.8yrsno data0.013% $5.7m
Lisa Flavin
Chief Compliance Officer & VP of Audit0yrsno datano data

3.8yrs

Average Tenure

55yo

Average Age

Experienced Management: EMR's management team is considered experienced (3.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
David Farr
Chairman & CEO19.3yrsUS$20.30m0.42% $185.4m
Candace Kendle
Independent Director6yrsUS$289.47k0.0032% $1.4m
Clemens A. Börsig
Lead Independent Director0yrsUS$357.30k0.0047% $2.1m
Arthur Golden
Independent Director20.1yrsUS$402.49k0.013% $5.5m
James Turley
Independent Director6.6yrsUS$323.64k0.0028% $1.2m
Martin Craighead
Independent Director0.7yrsUS$145.81k0.00076% $335.2k
Matthew Levatich
Independent Director7.5yrsUS$318.65k0.0032% $1.4m
Gloria Flach
Independent Director2.8yrsUS$298.97k0.0014% $608.7k
Joshua Bolten
Independent Director8yrsUS$330.81k0.0034% $1.5m
Lori Lee
Independent Director1.3yrsUS$309.99k0.00080% $352.9k

6.6yrs

Average Tenure

64yo

Average Age

Experienced Board: EMR's board of directors are considered experienced (6.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: EMR insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Emerson Electric Co.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Emerson Electric Co.
  • Ticker: EMR
  • Exchange: NYSE
  • Founded: 1890
  • Industry: Electrical Components and Equipment
  • Sector: Capital Goods
  • Market Cap: US$44.108b
  • Shares outstanding: 611.84m
  • Website: https://www.emerson.com

Number of Employees


Location

  • Emerson Electric Co.
  • 8000 West Florissant Avenue
  • PO Box 4100
  • St. Louis
  • Missouri
  • 63136
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
EMRNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
EMRDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
EMR *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
EMRSWX (SIX Swiss Exchange)YesCommon StockCHCHFJan 1968
0R33LSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
EMRETLX (Eurotlx)YesCommon StockITEURJan 1968
E1MR34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 2 REPR 1 SHS UNSPONBRBRLJan 2020

Biography

Emerson Electric Co., a technology and engineering company, provides solutions to industrial, commercial, and consumer markets worldwide. It operates through Automation Solutions and Commercial & Residential Solutions segments. The Automation Solutions segment offers measurement and analytical instrumentation, industrial valves and equipment, and process control software and systems. It serves the oil and gas, refining, chemicals and power generation, pharmaceuticals, food and beverage, automotive, pulp and paper, metals and mining, and municipal water supplies markets. The Commercial & Residential Solutions segment offers residential and commercial heating and air conditioning products, such as residential and variable speed scroll compressors; system protector and flow control devices; standard, programmable, and Wi-Fi thermostats; monitoring equipment and electronic controls for gas and electric heating systems; gas valves for furnaces and water heaters; ignition systems for furnaces; sensors and thermistors for home appliances; and temperature sensors and controls. It also provides reciprocating, scroll, and screw compressors; precision flow controls; system diagnostics and controls; and environmental control systems for use in medical, food processing, and cold storage applications. In addition, this segment offers air conditioning, refrigeration, and lighting control technologies, as well as facility design and product management, site commissioning, facility monitoring, and energy modeling services; temperature management and monitoring products for the foodservice markets; and professional and homeowner tools, and appliance solutions. The company was formerly known as The Emerson Electric Manufacturing Company and changed its name to Emerson Electric Co. in 2000. Emerson Electric Co. was founded in 1890 and is headquartered in St. Louis, Missouri. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/22 23:48
End of Day Share Price2020/02/21 00:00
Earnings2019/12/31
Annual Earnings2019/09/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.