EMERSON ELECTRIC CO (EMR) Stock Fundamental Analysis
NYSE:EMR - New York Stock Exchange, Inc. - US2910111044 - Common Stock - Currency: USD
Taking everything into account, EMR scores 6 out of 10 in our fundamental rating. EMR was compared to 94 industry peers in the Electrical Equipment industry. EMR has an excellent profitability rating, but there are some minor concerns on its financial health. EMR is not valued too expensively and it also shows a decent 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.
In the past 5 years EMR has always been profitable.
EMR had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 5.71%, EMR belongs to the top of the industry, outperforming 81.91% of the companies in the same industry.
With an excellent Return On Equity value of 12.44%, EMR belongs to the best of the industry, outperforming 82.98% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 7.63%, EMR is in the better half of the industry, outperforming 77.66% of the companies in the same industry.
EMR had an Average Return On Invested Capital over the past 3 years of 6.94%. This is below the industry average of 9.87%.
The 3 year average ROIC (6.94%) for EMR is below the current ROIC(7.63%), indicating increased profibility in the last year.
| 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
EMR has a Profit Margin of 13.60%. This is amongst the best in the industry. EMR outperforms 90.43% of its industry peers.
EMR's Profit Margin has declined in the last couple of years.
The Operating Margin of EMR (17.14%) is better than 91.49% of its industry peers.
EMR's Operating Margin has declined in the last couple of years.
With an excellent Gross Margin value of 52.77%, EMR belongs to the best of the industry, outperforming 97.87% of the companies in the same industry.
In the last couple of years the Gross Margin of EMR has grown nicely.
| 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
EMR has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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 3.87. 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 3.87, EMR is in the better half of the industry, outperforming 73.40% of the companies in the same industry.
The Debt to FCF ratio of EMR is 5.20, which is a neutral value as it means it would take EMR, 5.20 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 5.20, EMR is in the better half of the industry, outperforming 74.47% of the companies in the same industry.
A Debt/Equity ratio of 0.42 indicates that EMR is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.42, EMR perfoms like the industry average, outperforming 48.94% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.42 | ||
| Debt/FCF | 5.2 | ||
| Altman-Z | 3.87 |
ROIC/WACC0.78
WACC9.8%
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.
The Current ratio of EMR (0.80) is worse than 82.98% of its industry peers.
A Quick Ratio of 0.59 indicates that EMR may have some problems paying its short term obligations.
EMR has a Quick ratio of 0.59. This is in the lower half of the industry: EMR underperforms 77.66% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.59 |
3. Growth
3.1 Past
EMR shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.82%, 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 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
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
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 22.66, EMR is valued on the expensive side.
Based on the Price/Earnings ratio, EMR is valued a bit cheaper than 78.72% of the companies in the same industry.
EMR's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.91.
The Price/Forward Earnings ratio is 20.02, which indicates a rather expensive current valuation of EMR.
EMR's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. EMR is cheaper than 77.66% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.46. EMR is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.66 | ||
| Fwd PE | 20.02 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, EMR is valued a bit cheaper than the industry average as 75.53% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of EMR indicates a somewhat cheap valuation: EMR is cheaper than 78.72% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.62 | ||
| EV/EBITDA | 18.59 |
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)2.27
PEG (5Y)2.72
EPS Next 2Y9.05%
EPS Next 3Y8.74%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.64%, EMR has a reasonable but not impressive dividend return.
EMR's Dividend Yield is rather good when compared to the industry average which is at 4.47. EMR pays more dividend than 93.62% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.43, EMR is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.64% |
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.
EMR has decreased its dividend recently.
Dividend Growth(5Y)1.52%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
EMR pays out 50.06% of its income as dividend. 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%
130.73
+1.32 (+1.02%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryElectrical Equipment
Earnings (Last)
Earnings (Next)
Inst Owners82.81%
Inst Owner Change2.53%
Ins Owners0.21%
Ins Owner Change-0.28%
Market Cap73.54B
Analysts78.82
Price Target138.54 (5.97%)
Short Float %2.15%
Short Ratio3.7
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.64% |
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)-4.48%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.51%
EPS NY rev (1m)0.04%
EPS NY rev (3m)0.3%
Revenue NQ rev (1m)-0.02%
Revenue NQ rev (3m)0.98%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.67%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.66 | ||
| Fwd PE | 20.02 | ||
| P/S | 4.18 | ||
| P/FCF | 26.62 | ||
| P/OCF | 23.04 | ||
| P/B | 3.82 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.59 |
EPS(TTM)5.77
EY4.41%
EPS(NY)6.53
Fwd EY4.99%
FCF(TTM)4.91
FCFY3.76%
OCF(TTM)5.67
OCFY4.34%
SpS31.3
BVpS34.22
TBVpS-15.24
PEG (NY)2.27
PEG (5Y)2.72
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 | 3.87 |
F-Score6
WACC9.8%
ROIC/WACC0.78
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%