EMERSON ELECTRIC CO (EMR) Stock Fundamental Analysis
USA - NYSE:EMR - US2910111044 - Common Stock
129.03 USD
-6.63 (-4.89%)
129.94 USD
+0.91 (+0.71%)
EMR gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 92 industry peers in the Electrical Equipment industry. While EMR belongs to the best of the industry regarding profitability, 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
In the past year EMR was profitable.
In the past year EMR had a positive cash flow from operations.
EMR had positive earnings in each of the past 5 years.
Each year in the past 5 years EMR had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 6.24%, EMR belongs to the top of the industry, outperforming 81.52% of the companies in the same industry.
EMR's Return On Equity of 13.35% is amongst the best of the industry. EMR outperforms 84.78% of its industry peers.
Looking at the Return On Invested Capital, with a value of 8.37%, EMR belongs to the top of the industry, outperforming 80.43% of the companies in the same industry.
EMR had an Average Return On Invested Capital over the past 3 years of 5.88%. This is below the industry average of 9.86%.
The 3 year average ROIC (5.88%) for EMR is below the current ROIC(8.37%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.24% | ||
| ROE | 13.35% | ||
| ROIC | 8.37% |
ROA(3y)14.81%
ROA(5y)12.47%
ROE(3y)34.72%
ROE(5y)30.17%
ROIC(3y)5.88%
ROIC(5y)8.65%
1.3 Margins
EMR's Profit Margin of 14.92% is amongst the best of the industry. EMR outperforms 90.22% of its industry peers.
In the last couple of years the Profit Margin of EMR has declined.
EMR's Operating Margin of 19.03% is amongst the best of the industry. EMR outperforms 95.65% of its industry peers.
In the last couple of years the Operating Margin of EMR has declined.
Looking at the Gross Margin, with a value of 52.70%, EMR belongs to the top of the industry, outperforming 96.74% of the companies in the same industry.
EMR's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.03% | ||
| PM (TTM) | 14.92% | ||
| GM | 52.7% |
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
EMR has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
EMR has less shares outstanding than it did 1 year ago.
EMR has less shares outstanding than it did 5 years ago.
EMR has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.98 indicates that EMR is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 3.98, EMR is doing good in the industry, outperforming 72.83% of the companies in the same industry.
EMR has a debt to FCF ratio of 5.19. This is a neutral value as EMR would need 5.19 years to pay back of all of its debts.
The Debt to FCF ratio of EMR (5.19) is better than 73.91% of its industry peers.
A Debt/Equity ratio of 0.42 indicates that EMR is not too dependend on debt financing.
EMR has a Debt to Equity ratio (0.42) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.42 | ||
| Debt/FCF | 5.19 | ||
| Altman-Z | 3.98 |
ROIC/WACC1.04
WACC8.02%
2.3 Liquidity
A Current Ratio of 0.85 indicates that EMR may have some problems paying its short term obligations.
With a Current ratio value of 0.85, EMR is not doing good in the industry: 80.43% of the companies in the same industry are doing better.
EMR has a Quick Ratio of 0.85. This is a bad value and indicates that EMR is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.63, EMR is not doing good in the industry: 76.09% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.85 | ||
| Quick Ratio | 0.63 |
3. Growth
3.1 Past
EMR shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.57%, which is quite good.
The Earnings Per Share has been growing by 8.33% on average over the past years. This is quite good.
Looking at the last year, EMR shows a small growth in Revenue. The Revenue has grown by 4.81% in the last year.
EMR shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.98% yearly.
EPS 1Y (TTM)10.57%
EPS 3Y10.22%
EPS 5Y8.33%
EPS Q2Q%6.29%
Revenue 1Y (TTM)4.81%
Revenue growth 3Y-1.38%
Revenue growth 5Y-0.98%
Sales Q2Q%3.95%
3.2 Future
Based on estimates for the next years, EMR will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.54% on average per year.
Based on estimates for the next years, EMR will show a small growth in Revenue. The Revenue will grow by 5.80% on average per year.
EPS Next Y10.4%
EPS Next 2Y9.58%
EPS Next 3Y9.19%
EPS Next 5Y8.54%
Revenue Next Year3.71%
Revenue Next 2Y4.62%
Revenue Next 3Y4.68%
Revenue Next 5Y5.8%
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
Based on the Price/Earnings ratio of 22.02, the valuation of EMR can be described as rather expensive.
Based on the Price/Earnings ratio, EMR is valued cheaper than 82.61% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.20. EMR is around the same levels.
A Price/Forward Earnings ratio of 19.57 indicates a rather expensive valuation of EMR.
81.52% of the companies in the same industry are more expensive than EMR, based on the Price/Forward Earnings ratio.
EMR's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.71.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.02 | ||
| Fwd PE | 19.57 |
4.2 Price Multiples
78.26% 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 cheaply inside the industry as 80.43% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.49 | ||
| EV/EBITDA | 17.86 |
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.
EMR has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.12
PEG (5Y)2.64
EPS Next 2Y9.58%
EPS Next 3Y9.19%
5. Dividend
5.1 Amount
EMR has a Yearly Dividend Yield of 1.53%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.03, EMR pays a better dividend. On top of this EMR pays more dividend than 93.48% of the companies listed in the same industry.
EMR's Dividend Yield is slightly below the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.53% |
5.2 History
The dividend of EMR has a limited annual growth rate of 1.52%.
EMR has paid a dividend for at least 10 years, which is 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
45.06% 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.
DP45.06%
EPS Next 2Y9.58%
EPS Next 3Y9.19%
129.03
-6.63 (-4.89%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryElectrical Equipment
Earnings (Last)
Earnings (Next)
Inst Owners83.16%
Inst Owner Change1.23%
Ins Owners0.21%
Ins Owner Change-0.47%
Market Cap72.62B
Analysts78.82
Price Target151.68 (17.55%)
Short Float %2.74%
Short Ratio4.92
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.53% |
Yearly Dividend2.1
Dividend Growth(5Y)1.52%
DP45.06%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.65%
Min EPS beat(2)-0.41%
Max EPS beat(2)3.72%
EPS beat(4)2
Avg EPS beat(4)2.48%
Min EPS beat(4)-0.41%
Max EPS beat(4)6.76%
EPS beat(8)4
Avg EPS beat(8)3.84%
EPS beat(12)7
Avg EPS beat(12)4.29%
EPS beat(16)11
Avg EPS beat(16)4.43%
Revenue beat(2)1
Avg Revenue beat(2)-0.92%
Min Revenue beat(2)-1.94%
Max Revenue beat(2)0.09%
Revenue beat(4)2
Avg Revenue beat(4)-1%
Min Revenue beat(4)-2.32%
Max Revenue beat(4)0.17%
Revenue beat(8)4
Avg Revenue beat(8)-0.62%
Revenue beat(12)6
Avg Revenue beat(12)-0.42%
Revenue beat(16)7
Avg Revenue beat(16)-2.6%
PT rev (1m)2.96%
PT rev (3m)11.12%
EPS NQ rev (1m)0.22%
EPS NQ rev (3m)-0.21%
EPS NY rev (1m)0.21%
EPS NY rev (3m)0.41%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)0.26%
Revenue NY rev (1m)-0.13%
Revenue NY rev (3m)-0.02%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.02 | ||
| Fwd PE | 19.57 | ||
| P/S | 4.08 | ||
| P/FCF | 26.49 | ||
| P/OCF | 22.89 | ||
| P/B | 3.65 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.86 |
EPS(TTM)5.86
EY4.54%
EPS(NY)6.59
Fwd EY5.11%
FCF(TTM)4.87
FCFY3.77%
OCF(TTM)5.64
OCFY4.37%
SpS31.59
BVpS35.31
TBVpS-14.14
PEG (NY)2.12
PEG (5Y)2.64
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.24% | ||
| ROE | 13.35% | ||
| ROCE | 10.64% | ||
| ROIC | 8.37% | ||
| ROICexc | 9% | ||
| ROICexgc | 153.04% | ||
| OM | 19.03% | ||
| PM (TTM) | 14.92% | ||
| GM | 52.7% | ||
| FCFM | 15.42% |
ROA(3y)14.81%
ROA(5y)12.47%
ROE(3y)34.72%
ROE(5y)30.17%
ROIC(3y)5.88%
ROIC(5y)8.65%
ROICexc(3y)6.74%
ROICexc(5y)10.11%
ROICexgc(3y)28.81%
ROICexgc(5y)33.99%
ROCE(3y)7.63%
ROCE(5y)11.31%
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-Score7
Asset Turnover0.42
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.42 | ||
| Debt/FCF | 5.19 | ||
| Debt/EBITDA | 1.67 | ||
| Cap/Depr | 27.54% | ||
| Cap/Sales | 2.42% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 64.11% | ||
| Profit Quality | 103.36% | ||
| Current Ratio | 0.85 | ||
| Quick Ratio | 0.63 | ||
| Altman-Z | 3.98 |
F-Score7
WACC8.02%
ROIC/WACC1.04
Cap/Depr(3y)36.82%
Cap/Depr(5y)46.68%
Cap/Sales(3y)2.88%
Cap/Sales(5y)3.01%
Profit Quality(3y)74.7%
Profit Quality(5y)96.72%
High Growth Momentum
Growth
EPS 1Y (TTM)10.57%
EPS 3Y10.22%
EPS 5Y8.33%
EPS Q2Q%6.29%
EPS Next Y10.4%
EPS Next 2Y9.58%
EPS Next 3Y9.19%
EPS Next 5Y8.54%
Revenue 1Y (TTM)4.81%
Revenue growth 3Y-1.38%
Revenue growth 5Y-0.98%
Sales Q2Q%3.95%
Revenue Next Year3.71%
Revenue Next 2Y4.62%
Revenue Next 3Y4.68%
Revenue Next 5Y5.8%
EBIT growth 1Y35.32%
EBIT growth 3Y-8.56%
EBIT growth 5Y-4.71%
EBIT Next Year23.94%
EBIT Next 3Y11.92%
EBIT Next 5Y7.7%
FCF growth 1Y30.09%
FCF growth 3Y-0.91%
FCF growth 5Y3.85%
OCF growth 1Y27.03%
OCF growth 3Y-2.32%
OCF growth 5Y2.08%