EMERSON ELECTRIC CO (EMR)
US2910111044 - Common Stock
We assign a fundamental rating of 6 out of 10 to EMR. EMR was compared to 86 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 valuation in line with the averages, but on the other hand it scores bad on growth.
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
EMR has a better Return On Assets (23.71%) than 100.00% of its industry peers.
EMR has a Return On Equity of 53.35%. This is amongst the best in the industry. EMR outperforms 100.00% of its industry peers.
EMR has a better Return On Invested Capital (5.62%) than 69.05% of its industry peers.
EMR had an Average Return On Invested Capital over the past 3 years of 9.73%. This is in line with the industry average of 10.34%.
The last Return On Invested Capital (5.62%) for EMR is well below the 3 year average (9.73%), which needs to be investigated, but indicates that EMR had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 23.71% | ||
| ROE | 53.35% | ||
| ROIC | 5.62% |
ROA(3y)16.43%
ROA(5y)13.83%
ROE(3y)39.46%
ROE(5y)33.95%
ROIC(3y)9.73%
ROIC(5y)11.45%
1.3 Margins
EMR's Profit Margin of 69.33% is amongst the best of the industry. EMR outperforms 100.00% of its industry peers.
EMR's Profit Margin has improved in the last couple of years.
EMR's Operating Margin of 17.42% is amongst the best of the industry. EMR outperforms 92.86% of its industry peers.
In the last couple of years the Operating Margin of EMR has grown nicely.
EMR has a Gross Margin of 48.54%. This is amongst the best in the industry. EMR outperforms 95.24% of its industry peers.
EMR's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.42% | ||
| PM (TTM) | 69.33% | ||
| GM | 48.54% |
OM growth 3Y5.02%
OM growth 5Y2.78%
PM growth 3Y95.27%
PM growth 5Y47.1%
GM growth 3Y5.46%
GM growth 5Y2.66%
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.
Compared to 1 year ago, EMR has less shares outstanding
Compared to 5 years ago, EMR has less shares outstanding
The debt/assets ratio for EMR has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.18 indicates that EMR is not in any danger for bankruptcy at the moment.
EMR has a Altman-Z score of 3.18. This is in the better half of the industry: EMR outperforms 71.43% of its industry peers.
EMR has a debt to FCF ratio of 42.92. This is a negative value and a sign of low solvency as EMR would need 42.92 years to pay back of all of its debts.
The Debt to FCF ratio of EMR (42.92) is better than 69.05% of its industry peers.
A Debt/Equity ratio of 0.37 indicates that EMR is not too dependend on debt financing.
EMR's Debt to Equity ratio of 0.37 is in line compared to the rest of the industry. EMR outperforms 47.62% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.37 | ||
| Debt/FCF | 42.92 | ||
| Altman-Z | 3.18 |
ROIC/WACC0.56
WACC10.08%
2.3 Liquidity
EMR has a Current Ratio of 1.12. This is a normal value and indicates that EMR is financially healthy and should not expect problems in meeting its short term obligations.
EMR has a worse Current ratio (1.12) than 86.90% of its industry peers.
A Quick Ratio of 0.80 indicates that EMR may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.80, EMR is doing worse than 78.57% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.12 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
EMR shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.61%.
EMR shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.23% yearly.
Looking at the last year, EMR shows a very negative growth in Revenue. The Revenue has decreased by -14.14% in the last year.
The Revenue has been decreasing by -2.72% on average over the past years.
EPS 1Y (TTM)-2.61%
EPS 3Y8.42%
EPS 5Y7.23%
EPS growth Q2Q56.41%
Revenue 1Y (TTM)-14.14%
Revenue growth 3Y-3.33%
Revenue growth 5Y-2.72%
Revenue growth Q2Q22.06%
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 11.34% on average per year.
Based on estimates for the next years, EMR will show a small growth in Revenue. The Revenue will grow by 7.60% on average per year.
EPS Next Y23.42%
EPS Next 2Y15.86%
EPS Next 3Y13.8%
EPS Next 5Y11.34%
Revenue Next Year15.18%
Revenue Next 2Y10.2%
Revenue Next 3Y8.31%
Revenue Next 5Y7.6%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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 21.97, the valuation of EMR can be described as rather expensive.
76.19% of the companies in the same industry are more expensive than EMR, based on the Price/Earnings ratio.
EMR is valuated rather cheaply when we compare the Price/Earnings ratio to 28.28, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 18.00, the valuation of EMR can be described as rather expensive.
Based on the Price/Forward Earnings ratio, EMR is valued a bit cheaper than the industry average as 79.76% of the companies are valued more expensively.
EMR's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 20.88.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.97 | ||
| Fwd PE | 18 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of EMR indicates a somewhat cheap valuation: EMR is cheaper than 75.00% of the companies listed in the same industry.
69.05% 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 | 240.75 | ||
| EV/EBITDA | 17.49 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of EMR may justify a higher PE ratio.
EMR's earnings are expected to grow with 13.80% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.94
PEG (5Y)3.04
EPS Next 2Y15.86%
EPS Next 3Y13.8%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.97%, EMR has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.29, EMR pays a better dividend. On top of this EMR pays more dividend than 94.05% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.41, EMR has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.97% |
5.2 History
The dividend of EMR has a limited annual growth rate of 1.27%.
EMR has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)1.27%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
10.81% of the earnings are spent on dividend by EMR. This is a low number and sustainable payout ratio.
The dividend of EMR is growing, but earnings are growing more, so the dividend growth is sustainable.
DP10.81%
EPS Next 2Y15.86%
EPS Next 3Y13.8%
EMERSON ELECTRIC CO
NYSE:EMR (5/3/2024, 7:04:00 PM)
After market: 106.54 0 (0%)106.54
+0.13 (+0.12%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryElectrical Equipment
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
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Market Cap60.91B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.97% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.97 | ||
| Fwd PE | 18 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.94
PEG (5Y)3.04
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 23.71% | ||
| ROE | 53.35% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 17.42% | ||
| PM (TTM) | 69.33% | ||
| GM | 48.54% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.34
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.37 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.12 | ||
| Quick Ratio | 0.8 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-2.61%
EPS 3Y8.42%
EPS 5Y
EPS growth Q2Q
EPS Next Y23.42%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-14.14%
Revenue growth 3Y-3.33%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
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EBIT growth 3Y
EBIT growth 5Y
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