(281)-719-8904 KenFaulkenberry@AAAMP.com

Emerson Electric (EMR) Stock Analysis

by | Dividend Aristocrats, Dividend Champions, Dividend Kings

Emerson Electric Dividend

(updated 2/23/2018)

Emerson Electric (EMR) has paid a dividend since 1947 and increased its dividend for 61 consecutive years; qualifying the company as a  Dividend King, Dividend Aristocrat, and Dividend Champion.

Price: $72.17
Dividend Yield: 2.7%

Current Dividend: $1.94
Cash Flow From Operations (CFO) Per Share (ttm): $3.30
Free Cash Flow Per Share (ttm): $2.57

Market Capitalization: $46 B
Enterprise Value: $48 B

Dividend Analyzer Checklist

(updated January 2018)

Dividend Safety Score (21/33 points)

Dividend Payout Ratio (ttm): 82%
Cash Dividend Payout Ratio (ttm): 86%  (4/12 points)
Net Financial Debt: $1594 M
Total Assets: $19589 M
Net Financial Debt / Total Assets: 18%  (10/12 points)
Net Financial Debt to EBITDA (ttm): 173%
Piotroski Score (1-9) (TTM): (7/9 points)


Profitability Score (17/33 points)

Operating Earnings Yield (ttm):  5.9% (8/15 points)
Net Income (ttm): $1518 M
Gross Profit (ttm): $6404 M
Total Assets: $19589 M
Gross Profitability Ratio = GP / Total Assets: 33% (11/18 points)
Cash Return On Invested Capital (CROIC)(tttm): 11%
Return on Invested Capital (ROIC): 12%

Valuation Score (12/34 points)

Free Cash Flow Yield (ttm): 3.2% (7/17 points)
EV to EBIT (ttm): 18.0
EV to EBITDA (ttm): 14.4 (5/17 points)
Price to Sales Ratio (ttm): 2.9
Price to Book Value (ttm):  5.1
Price to Earnings Ratio (P/E) (ttm): 30
PE 10: 24

TOTAL POINTS – (50/100) (50 is an average score)

Earnings Report: 11/07/17
Next Earnings Report: 2/07/18

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Rankings & Recommendations

(updated January 2018)

Emerson Electric (EMR) is ranked #151 (out of 372) overall and #41 (out of 86) in the Industrials Sector by the Dividend Analyzer.

The fact that EMR has increased dividends paid for 61 consecutive years, means the stock deserves some kind of premium. I’m concerned that premium is too high and not taking into account all the current risk.

Type of Investor / Recommendation

Large Diversified Dividend Portfolios /  Can Be Considered
Looking For Exposure to Industrials Sector / Can Be Considered
Deep Value Investors /  Watchlist

Portfolio Position Disclosures:
DVB Portfolio Stocks: None
AAAMP Global Value Portfolio: None
AAAMP Retirement Growth & Income Portfolio: None
AAAMP Treasure Trove Twelve Portfolio: None

Company Description

Sector: Industrials
Industry: Diversified Industrials

Emerson is a global diversified manufacturing and solutions company. EMR combines technology and engineering to help customers innovate to improve productivity and efficiency. The company serves the industrial, commercial and consumer markets through two new business platforms: Automation Solutions and Commercial & Residential Solutions.

SWOT Analysis


Emerson has a long history of adapting to changing environments. Big changes are underway right now; shedding business (i.e. Network Power in 2016) and focusing businesses that fit their two new platforms.

EMR has a strong global presence (more that 150 countries) with a little more than one-half of EMR revenues coming from overseas. The company has a deep and varied product portfolio complemented by a stellar reputation and strong brand. It boasts a large “moat” in field instrument segments and asset management systems.


High research and development costs. EMR’s large customers have high bargaining power.


New technologies and obsolescence of older customers plants provide opportunities for substantial growth in developed nations. Expansion into new frontier markets.


There is intense competition in some of EMR’s business segments, particularly industrial automation. In addition, as a truly global company, they are subject to economic and political risks affiliated with foreign production facilities.

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Disclaimer: While Arbor Investment Planner has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability, or completeness of third-party information presented herein. The sole purpose of this analysis is information. Nothing presented herein is, or is intended to constitute investment advice. Consult your financial advisor before making investment decisions.
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