EMERSON ELECTRIC CO (EMR) Stock Fundamental Analysis
NYSE:EMR - New York Stock Exchange, Inc. - US2910111044 - Common Stock - Currency: USD
EMR gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 94 industry peers in the Electrical Equipment industry. While EMR has a great profitability rating, there are some minor concerns on its financial health. EMR has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
EMR had positive earnings in the past year.
In the past year EMR had a positive cash flow from operations.
Each year in the past 5 years EMR has been profitable.
Each year in the past 5 years EMR had a positive operating cash flow.
1.2 Ratios
EMR's Return On Assets of 5.71% is amongst the best of the industry. EMR outperforms 81.91% of its industry peers.
Looking at the Return On Equity, with a value of 12.44%, EMR belongs to the top of the industry, outperforming 82.98% of the companies in the same industry.
EMR's Return On Invested Capital of 7.63% is fine compared to the rest of the industry. EMR outperforms 77.66% of its industry peers.
The Average Return On Invested Capital over the past 3 years for EMR is below the industry average of 9.89%.
The last Return On Invested Capital (7.63%) for EMR is above the 3 year average (6.94%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.71% | ||
| ROE | 12.44% | ||
| ROIC | 7.63% |
ROA(3y)14.81%
ROA(5y)12.47%
ROE(3y)34.72%
ROE(5y)30.17%
ROIC(3y)6.94%
ROIC(5y)9.3%
1.3 Margins
With an excellent Profit Margin value of 13.60%, EMR belongs to the best of the industry, outperforming 90.43% of the companies in the same industry.
EMR's Profit Margin has declined in the last couple of years.
EMR's Operating Margin of 17.14% is amongst the best of the industry. EMR outperforms 91.49% of its industry peers.
EMR's Operating Margin has declined in the last couple of years.
EMR has a Gross Margin of 52.77%. This is amongst the best in the industry. EMR outperforms 97.87% of its industry peers.
EMR's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.14% | ||
| PM (TTM) | 13.6% | ||
| GM | 52.77% |
OM growth 3Y-7.28%
OM growth 5Y-3.77%
PM growth 3Y-3.78%
PM growth 5Y-2.16%
GM growth 3Y6.99%
GM growth 5Y3.61%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), EMR is destroying value.
EMR has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, EMR has less shares outstanding
EMR has a better debt/assets ratio than last year.
2.2 Solvency
EMR has an Altman-Z score of 3.99. This indicates that EMR is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.99, EMR is in the better half of the industry, outperforming 72.34% of the companies in the same industry.
EMR has a debt to FCF ratio of 5.20. This is a neutral value as EMR would need 5.20 years to pay back of all of its debts.
EMR has a Debt to FCF ratio of 5.20. This is in the better half of the industry: EMR outperforms 74.47% of its industry peers.
EMR has a Debt/Equity ratio of 0.42. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.42, EMR is in line with its industry, outperforming 48.94% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.42 | ||
| Debt/FCF | 5.2 | ||
| Altman-Z | 3.99 |
ROIC/WACC0.91
WACC8.38%
2.3 Liquidity
EMR has a Current Ratio of 0.80. This is a bad value and indicates that EMR is not financially healthy enough and could expect problems in meeting its short term obligations.
EMR has a Current ratio of 0.80. This is amonst the worse of the industry: EMR underperforms 82.98% of its industry peers.
A Quick Ratio of 0.59 indicates that EMR may have some problems paying its short term obligations.
With a Quick ratio value of 0.59, EMR is not doing good in the industry: 77.66% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.59 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 11.82% over the past year.
EMR shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.33% yearly.
Looking at the last year, EMR shows a small growth in Revenue. The Revenue has grown by 6.52% in the last year.
Measured over the past years, EMR shows a decrease in Revenue. The Revenue has been decreasing by -0.98% on average per year.
EPS 1Y (TTM)11.82%
EPS 3Y10.22%
EPS 5Y8.33%
EPS Q2Q%8.82%
Revenue 1Y (TTM)6.52%
Revenue growth 3Y-1.38%
Revenue growth 5Y-0.98%
Sales Q2Q%1.28%
3.2 Future
EMR is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.52% yearly.
The Revenue is expected to grow by 6.02% on average over the next years.
EPS Next Y9.99%
EPS Next 2Y9.05%
EPS Next 3Y8.74%
EPS Next 5Y8.52%
Revenue Next Year3.73%
Revenue Next 2Y4.29%
Revenue Next 3Y4.35%
Revenue Next 5Y6.02%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 24.04, EMR is valued on the expensive side.
EMR's Price/Earnings ratio is a bit cheaper when compared to the industry. EMR is cheaper than 78.72% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.30, EMR is valued at the same level.
The Price/Forward Earnings ratio is 21.25, which indicates a rather expensive current valuation of EMR.
Compared to the rest of the industry, the Price/Forward Earnings ratio of EMR indicates a somewhat cheap valuation: EMR is cheaper than 75.53% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.76. EMR is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.04 | ||
| Fwd PE | 21.25 |
4.2 Price Multiples
75.53% of the companies in the same industry are more expensive than EMR, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, EMR is valued a bit cheaper than the industry average as 78.72% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.25 | ||
| EV/EBITDA | 19.56 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates EMR does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of EMR may justify a higher PE ratio.
PEG (NY)2.41
PEG (5Y)2.89
EPS Next 2Y9.05%
EPS Next 3Y8.74%
5. Dividend
5.1 Amount
EMR has a Yearly Dividend Yield of 1.51%.
Compared to an average industry Dividend Yield of 4.27, EMR pays a better dividend. On top of this EMR pays more dividend than 92.55% of the companies listed in the same industry.
EMR's Dividend Yield is slightly below the S&P500 average, which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.51% |
5.2 History
The dividend of EMR has a limited annual growth rate of 1.52%.
EMR has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of EMR decreased recently.
Dividend Growth(5Y)1.52%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
50.06% of the earnings are spent on dividend by EMR. This is a bit on the high side, but may be sustainable.
The dividend of EMR is growing, but earnings are growing more, so the dividend growth is sustainable.
DP50.06%
EPS Next 2Y9.05%
EPS Next 3Y8.74%
138.73
+0.33 (+0.24%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryElectrical Equipment
Earnings (Last)
Earnings (Next)
Inst Owners82.81%
Inst Owner Change0.07%
Ins Owners0.21%
Ins Owner Change-0.28%
Market Cap78.04B
Analysts78.29
Price Target138.54 (-0.14%)
Short Float %2.38%
Short Ratio4.39
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.51% |
Yearly Dividend2.1
Dividend Growth(5Y)1.52%
DP50.06%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5.24%
Min EPS beat(2)3.72%
Max EPS beat(2)6.76%
EPS beat(4)2
Avg EPS beat(4)2.54%
Min EPS beat(4)-0.19%
Max EPS beat(4)6.76%
EPS beat(8)5
Avg EPS beat(8)5.89%
EPS beat(12)8
Avg EPS beat(12)4.76%
EPS beat(16)12
Avg EPS beat(16)5.08%
Revenue beat(2)1
Avg Revenue beat(2)-1.11%
Min Revenue beat(2)-2.32%
Max Revenue beat(2)0.09%
Revenue beat(4)2
Avg Revenue beat(4)-1.15%
Min Revenue beat(4)-2.54%
Max Revenue beat(4)0.17%
Revenue beat(8)5
Avg Revenue beat(8)-0.28%
Revenue beat(12)6
Avg Revenue beat(12)-0.53%
Revenue beat(16)8
Avg Revenue beat(16)-2.4%
PT rev (1m)4.28%
PT rev (3m)-3.43%
EPS NQ rev (1m)0.12%
EPS NQ rev (3m)-2.11%
EPS NY rev (1m)0.04%
EPS NY rev (3m)0.35%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)1.04%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.61%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.04 | ||
| Fwd PE | 21.25 | ||
| P/S | 4.43 | ||
| P/FCF | 28.25 | ||
| P/OCF | 24.45 | ||
| P/B | 4.05 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.56 |
EPS(TTM)5.77
EY4.16%
EPS(NY)6.53
Fwd EY4.71%
FCF(TTM)4.91
FCFY3.54%
OCF(TTM)5.67
OCFY4.09%
SpS31.3
BVpS34.22
TBVpS-15.24
PEG (NY)2.41
PEG (5Y)2.89
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.71% | ||
| ROE | 12.44% | ||
| ROCE | 9.69% | ||
| ROIC | 7.63% | ||
| ROICexc | 8.12% | ||
| ROICexgc | 166.94% | ||
| OM | 17.14% | ||
| PM (TTM) | 13.6% | ||
| GM | 52.77% | ||
| FCFM | 15.69% |
ROA(3y)14.81%
ROA(5y)12.47%
ROE(3y)34.72%
ROE(5y)30.17%
ROIC(3y)6.94%
ROIC(5y)9.3%
ROICexc(3y)7.87%
ROICexc(5y)10.79%
ROICexgc(3y)33.79%
ROICexgc(5y)37%
ROCE(3y)9.05%
ROCE(5y)12.16%
ROICexcg growth 3Y-11.32%
ROICexcg growth 5Y-10.06%
ROICexc growth 3Y-28.85%
ROICexc growth 5Y-20.68%
OM growth 3Y-7.28%
OM growth 5Y-3.77%
PM growth 3Y-3.78%
PM growth 5Y-2.16%
GM growth 3Y6.99%
GM growth 5Y3.61%
F-Score6
Asset Turnover0.42
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.42 | ||
| Debt/FCF | 5.2 | ||
| Debt/EBITDA | 1.77 | ||
| Cap/Depr | 26.71% | ||
| Cap/Sales | 2.44% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 68.99% | ||
| Profit Quality | 115.32% | ||
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.59 | ||
| Altman-Z | 3.99 |
F-Score6
WACC8.38%
ROIC/WACC0.91
Cap/Depr(3y)36.82%
Cap/Depr(5y)46.68%
Cap/Sales(3y)2.5%
Cap/Sales(5y)2.78%
Profit Quality(3y)74.7%
Profit Quality(5y)96.72%
High Growth Momentum
Growth
EPS 1Y (TTM)11.82%
EPS 3Y10.22%
EPS 5Y8.33%
EPS Q2Q%8.82%
EPS Next Y9.99%
EPS Next 2Y9.05%
EPS Next 3Y8.74%
EPS Next 5Y8.52%
Revenue 1Y (TTM)6.52%
Revenue growth 3Y-1.38%
Revenue growth 5Y-0.98%
Sales Q2Q%1.28%
Revenue Next Year3.73%
Revenue Next 2Y4.29%
Revenue Next 3Y4.35%
Revenue Next 5Y6.02%
EBIT growth 1Y7.44%
EBIT growth 3Y-8.56%
EBIT growth 5Y-4.71%
EBIT Next Year23.6%
EBIT Next 3Y11.57%
EBIT Next 5Y7.7%
FCF growth 1Y37%
FCF growth 3Y-0.91%
FCF growth 5Y3.85%
OCF growth 1Y30.66%
OCF growth 3Y-2.32%
OCF growth 5Y2.08%