EMERSON ELECTRIC CO (EMR.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:EMR - US2910111044 - Common Stock
125.34 EUR
+1.84 (+1.49%)
Taking everything into account, EMR scores 6 out of 10 in our fundamental rating. EMR was compared to 75 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
- 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.
- In the past 5 years EMR always reported a positive cash flow from operatings.
1.2 Ratios
- Looking at the Return On Assets, with a value of 5.46%, EMR is in the better half of the industry, outperforming 72.00% of the companies in the same industry.
- EMR has a Return On Equity of 11.30%. This is in the better half of the industry: EMR outperforms 64.00% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 8.77%, EMR is in the better half of the industry, outperforming 72.00% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for EMR is below the industry average of 9.57%.
- The 3 year average ROIC (6.24%) for EMR is below the current ROIC(8.77%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.46% | ||
| ROE | 11.3% | ||
| ROIC | 8.77% |
ROA(3y)13.61%
ROA(5y)11.84%
ROE(3y)28.1%
ROE(5y)27.75%
ROIC(3y)6.24%
ROIC(5y)7.7%
1.3 Margins
- EMR's Profit Margin of 12.72% is amongst the best of the industry. EMR outperforms 88.00% of its industry peers.
- In the last couple of years the Profit Margin of EMR has grown nicely.
- Looking at the Operating Margin, with a value of 20.12%, EMR belongs to the top of the industry, outperforming 94.67% of the companies in the same industry.
- EMR's Operating Margin has improved in the last couple of years.
- EMR has a better Gross Margin (52.83%) than 84.00% of its industry peers.
- EMR's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.12% | ||
| PM (TTM) | 12.72% | ||
| GM | 52.83% |
OM growth 3Y4.07%
OM growth 5Y3.94%
PM growth 3Y-18.38%
PM growth 5Y1.69%
GM growth 3Y4.97%
GM growth 5Y4.82%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), EMR is creating some value.
- Compared to 1 year ago, EMR has less shares outstanding
- The number of shares outstanding for EMR has been reduced compared to 5 years ago.
- The debt/assets ratio for EMR is higher compared to a year ago.
2.2 Solvency
- EMR has an Altman-Z score of 4.33. This indicates that EMR is financially healthy and has little risk of bankruptcy at the moment.
- The Altman-Z score of EMR (4.33) is better than 78.67% of its industry peers.
- The Debt to FCF ratio of EMR is 4.92, which is a neutral value as it means it would take EMR, 4.92 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of EMR (4.92) is better than 62.67% of its industry peers.
- A Debt/Equity ratio of 0.41 indicates that EMR is not too dependend on debt financing.
- EMR's Debt to Equity ratio of 0.41 is in line compared to the rest of the industry. EMR outperforms 60.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.41 | ||
| Debt/FCF | 4.92 | ||
| Altman-Z | 4.33 |
ROIC/WACC1.1
WACC7.97%
2.3 Liquidity
- EMR has a Current Ratio of 0.88. 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's Current ratio of 0.88 is on the low side compared to the rest of the industry. EMR is outperformed by 88.00% of its industry peers.
- EMR has a Quick Ratio of 0.88. 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 worse Quick ratio (0.65) than 78.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.88 | ||
| Quick Ratio | 0.65 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 9.29% over the past year.
- Measured over the past years, EMR shows a quite strong growth in Earnings Per Share. The EPS has been growing by 11.64% on average per year.
- The Revenue has been growing slightly by 2.99% in the past year.
- Measured over the past years, EMR shows a small growth in Revenue. The Revenue has been growing by 1.43% on average per year.
EPS 1Y (TTM)9.29%
EPS 3Y4.55%
EPS 5Y11.64%
EPS Q2Q%9.46%
Revenue 1Y (TTM)2.99%
Revenue growth 3Y9.28%
Revenue growth 5Y1.43%
Sales Q2Q%5.11%
3.2 Future
- The Earnings Per Share is expected to grow by 9.59% on average over the next years. This is quite good.
- EMR is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.02% yearly.
EPS Next Y9.19%
EPS Next 2Y9.52%
EPS Next 3Y9.49%
EPS Next 5Y9.59%
Revenue Next Year4.89%
Revenue Next 2Y5.02%
Revenue Next 3Y5.05%
Revenue Next 5Y5.02%
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
- The Price/Earnings ratio is 25.02, which means the current valuation is very expensive for EMR.
- 80.00% of the companies in the same industry are more expensive than EMR, based on the Price/Earnings ratio.
- When comparing the Price/Earnings ratio of EMR to the average of the S&P500 Index (28.39), we can say EMR is valued inline with the index average.
- A Price/Forward Earnings ratio of 22.91 indicates a rather expensive valuation of EMR.
- 64.00% of the companies in the same industry are more expensive than EMR, based on the Price/Forward Earnings ratio.
- The average S&P500 Price/Forward Earnings ratio is at 25.72. EMR is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.02 | ||
| Fwd PE | 22.91 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, EMR is valued a bit cheaper than the industry average as 64.00% of the companies are valued more expensively.
- EMR's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. EMR is cheaper than 69.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.61 | ||
| EV/EBITDA | 18.41 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The excellent profitability rating of EMR may justify a higher PE ratio.
PEG (NY)2.72
PEG (5Y)2.15
EPS Next 2Y9.52%
EPS Next 3Y9.49%
5. Dividend
5.1 Amount
- EMR has a Yearly Dividend Yield of 1.48%.
- EMR's Dividend Yield is rather good when compared to the industry average which is at 0.79. EMR pays more dividend than 82.67% of the companies in the same industry.
- EMR's Dividend Yield is comparable with the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.48% |
5.2 History
- The dividend of EMR has a limited annual growth rate of 1.02%.
Dividend Growth(5Y)1.02%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- EMR pays out 52.01% of its income as dividend. This is a bit on the high side, but may be sustainable.
- EMR's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP52.01%
EPS Next 2Y9.52%
EPS Next 3Y9.49%
EMERSON ELECTRIC CO / EMR.DE FAQ
Can you provide the ChartMill fundamental rating for EMERSON ELECTRIC CO?
ChartMill assigns a fundamental rating of 6 / 10 to EMR.DE.
Can you provide the valuation status for EMERSON ELECTRIC CO?
ChartMill assigns a valuation rating of 4 / 10 to EMERSON ELECTRIC CO (EMR.DE). This can be considered as Fairly Valued.
How profitable is EMERSON ELECTRIC CO (EMR.DE) stock?
EMERSON ELECTRIC CO (EMR.DE) has a profitability rating of 8 / 10.
What are the PE and PB ratios of EMERSON ELECTRIC CO (EMR.DE) stock?
The Price/Earnings (PE) ratio for EMERSON ELECTRIC CO (EMR.DE) is 25.02 and the Price/Book (PB) ratio is 4.16.
Is the dividend of EMERSON ELECTRIC CO sustainable?
The dividend rating of EMERSON ELECTRIC CO (EMR.DE) is 6 / 10 and the dividend payout ratio is 52.01%.