Daily Stock Analysis: Emerson Electric (EMR)

Emerson Electric Co, known by the ticker symbol EMR, is a large cap Specialty Industrial Machinery Firm, operating as an industrial conglomerate in the Industrials business sector. This is my first ever report on EMR for this Viital stock portfolio or any of my previous six portfolios

Emerson Electric is a multi-industrial conglomerate that operates under two business platforms: automation solutions and commercial and residential solutions. 

The latter is further subdivided into two operating segments: climate technologies, which sells HVAC and refrigeration products and services, as well as tools and home products, which sells tools and compressors, among other products and services.

worm's-eye view photography of concrete building

Photo by Kimon Maritz on Unsplash

Commercial and residential solutions boast several household brands, including Copeland, InSinkErator, and RIDGID. 

Automation solutions are most known for their process manufacturing solutions, which consist of measurement instrumentation, as well as valves and actuators, among other products and services. 

About half of the firm’s geographic sales take place in the United States.

The company was formerly known as The Emerson Electric Manufacturing Company and changed its name to Emerson Electric Co. in 2000.

Emerson Electric Co. was incorporated in 1890 and is headquartered in St. Louis, Missouri.

Three key data points gauge any dividend equity or fund such as Emerson Electric Co (EMR):

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money. 

EMR Price

EMR's price per share was $95.26 as of yesterday's market close. One year ago its price was $82.62. Therefore EMR share price rose $9.54 or nearly 15.3% in the past year.

If EMR's stock trades in the range of $80.00 to $120.00 this next year, it's a recent $95.26. share price might rise by $14.74 to reach $110.00 by January 11, 2023. This estimate is just $0.23 short of the median of 1-year price estimates from 22 analysts tracking EMR for their brokerages.

EMR Dividends

EMR's most recent quarterly dividend of  $0.515 was paid to shareholders yesterday January 10th to those of record November 10th. That Q dividend, payout equates to $2.06 annually and yields 2.16% per yesterday's $95.26. closing price. 

Emerson Electric Co  (EMR) has paid annually increasing quarterly dividend payouts since December 10, 1987 That came to 34 years last month.

EMR Returns

Adding the $2.06 annual estimated EMR forward-looking dividend to the analyst-estimated share-price increase of $14.74  shows a $16.80 potential gross gain, per share, to be reduced by any costs to trade EMR shares.  

At yesterday's $95.26 price per share, a little under $1000 would buy 10 shares.

A $10 broker fee (if charged) would be paid half at purchase and half at sale and might cost us about $1.00 per share.

Subtract that maybe $1.00 brokerage cost from my estimated $16.80 gross gain per share results in a net gain of $15.80 X 10 shares = $158.00 for a 15.8% net gain on a $952.60 investment.

So it is that Emerson Electric Co (EMR) shows a possible 15.8% net gain including a 2.16% forward estimated dividend yield. 

Over the next year at this time, a $1000 investment in Emerson Electric Co (EMR) could generate $21.60 in cash dividends alone. Note that a single share of EMR stock bought at yesterday's closing price was $95.26. Therefore, EMR's share price is nearly four and one-half times greater than the dividend income from $1000.00 invested. So, by my dogcatcher ideal, now is not a prime time to pick up Emerson Electric Co (EMR)  shares. The estimated next-year dividend from $1K invested is over 4.4 times less than EMR's single share price. Consider yourself alerted. It's a sign!  Wait for EMR price to drop below $46.

All of the estimates above are speculation based on the past history of Emerson Electric Co (EMR). Only time and money invested in this stock will determine its market value.

Disclaimer:  This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a ...

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Kurt Benson 1 year ago Member's comment

Thanks for the great analysis on $EMR. Was trying to decide whether to buy this stock and you helped me make my decision.