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 93 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 decent growth rate and is not valued too expensively.
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.
Each year in the past 5 years EMR had a positive operating cash flow.
1.2 Ratios
EMR has a Return On Assets of 5.71%. This is amongst the best in the industry. EMR outperforms 80.65% of its industry peers.
EMR's Return On Equity of 12.44% is amongst the best of the industry. EMR outperforms 82.80% of its industry peers.
With a decent Return On Invested Capital value of 7.63%, EMR is doing good in the industry, outperforming 78.49% 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 9.68%.
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
Looking at the Profit Margin, with a value of 13.60%, EMR belongs to the top of the industry, outperforming 90.32% of the companies in the same industry.
EMR's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 17.14%, EMR belongs to the top of the industry, outperforming 92.47% of the companies in the same industry.
In the last couple of years the Operating Margin of EMR has declined.
The Gross Margin of EMR (52.77%) is better than 96.77% of its industry peers.
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), EMR is destroying 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.
EMR has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 4.01 indicates that EMR is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.01, EMR is in the better half of the industry, outperforming 73.12% 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.
EMR's Debt to FCF ratio of 5.20 is fine compared to the rest of the industry. EMR outperforms 74.19% 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 of 0.42. This is comparable to the rest of the industry: EMR outperforms 48.39% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.42 | ||
| Debt/FCF | 5.2 | ||
| Altman-Z | 4.01 |
ROIC/WACC0.53
WACC14.5%
2.3 Liquidity
A Current Ratio of 0.80 indicates that EMR may have some problems paying its short term obligations.
The Current ratio of EMR (0.80) is worse than 83.87% of its industry peers.
EMR has a Quick 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's Quick ratio of 0.59 is on the low side compared to the rest of the industry. EMR is outperformed by 77.42% of its industry peers.
| 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.
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.
The Revenue has been decreasing by -0.98% on average over the past years.
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
Based on estimates for the next years, EMR will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.52% on average per year.
EMR is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.02% yearly.
EPS Next Y10.17%
EPS Next 2Y9.25%
EPS Next 3Y9.05%
EPS Next 5Y8.52%
Revenue Next Year3.85%
Revenue Next 2Y4.45%
Revenue Next 3Y4.57%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 23.21, the valuation of EMR can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of EMR indicates a somewhat cheap valuation: EMR is cheaper than 79.57% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 26.99. EMR is around the same levels.
A Price/Forward Earnings ratio of 20.44 indicates a rather expensive 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 78.49% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 36.36. EMR is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.21 | ||
| Fwd PE | 20.44 |
4.2 Price Multiples
76.34% of the companies in the same industry are more expensive than EMR, based on the Enterprise Value to EBITDA ratio.
79.57% of the companies in the same industry are more expensive than EMR, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.28 | ||
| EV/EBITDA | 19.79 |
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)2.28
PEG (5Y)2.79
EPS Next 2Y9.25%
EPS Next 3Y9.05%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.45%, 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 4.13. EMR pays more dividend than 91.40% of the companies in the same industry.
EMR's Dividend Yield is slightly below the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.45% |
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
EMR pays out 50.06% 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.
DP50.06%
EPS Next 2Y9.25%
EPS Next 3Y9.05%
133.93
-6.64 (-4.72%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryElectrical Equipment
Earnings (Last)
Earnings (Next)
Inst Owners82.81%
Inst Owner Change0.5%
Ins Owners0.21%
Ins Owner Change-0.28%
Market Cap75.34B
Analysts78.29
Price Target144.42 (7.83%)
Short Float %2.13%
Short Ratio4.19
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.45% |
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)4.25%
PT rev (3m)8.71%
EPS NQ rev (1m)0.27%
EPS NQ rev (3m)-1.91%
EPS NY rev (1m)0.16%
EPS NY rev (3m)1.28%
Revenue NQ rev (1m)0.02%
Revenue NQ rev (3m)0.74%
Revenue NY rev (1m)0.11%
Revenue NY rev (3m)1.12%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.21 | ||
| Fwd PE | 20.44 | ||
| P/S | 4.28 | ||
| P/FCF | 27.28 | ||
| P/OCF | 23.6 | ||
| P/B | 3.91 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.79 |
EPS(TTM)5.77
EY4.31%
EPS(NY)6.55
Fwd EY4.89%
FCF(TTM)4.91
FCFY3.67%
OCF(TTM)5.67
OCFY4.24%
SpS31.3
BVpS34.22
TBVpS-15.24
PEG (NY)2.28
PEG (5Y)2.79
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 | 4.01 |
F-Score6
WACC14.5%
ROIC/WACC0.53
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 Y10.17%
EPS Next 2Y9.25%
EPS Next 3Y9.05%
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 Year3.85%
Revenue Next 2Y4.45%
Revenue Next 3Y4.57%
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%