Daily Stock Pick: Emerson Electric

A portfolio of stocks I've been building since September 3, 2019, named Volio, will eventually hold 52 dividend dogs. Volio is the fifth portfolio I've built (at a one dividend dog per-week pace) since 2014. Five portfolios = V for Volio!

Today I'm reviewing the first of five industrials sector stocks poised to join my Volio folio this week. This could be my forty-first pick for Volio!

That industrials sector includes twenty-three industries all related to designing, fabricating, and servicing stuff we want and use. Those industrials industries range from aerospace and defense to waste management with all the transportation, business services, and equipment required in between.

My subject today is a large-cap specialty industrial machinery outfit named, Emerson Electric Co. Its trading ticker symbol is EMR. This is my first report on Emerson Electric Co for this Volio portfolio.

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.

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

Automation solutions is most known for its process manufacturing solutions, which consists 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 founded in 1890 and is headquartered in St. Louis, Missouri.

I use three key data points to gauge dividend equities or funds like Emerson Electric Co:

(1) Price

(2) Dividends

(3) Returns

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

EMR Price

Emerson's price per share closed at $67.10 Friday. A year ago their price was $63.68. Price rose $3.42 or 5.37% last year.

Assuming Emerson's stock trades in the range of $35 to $75  this next year, its recent $67.10 price might rise by $2.90 to reach $70.00 by June 8, 2021.

EMR Dividends

Emerson's most recent declared quarterly dividend was $0.50 payable June 10th. That Wednesday $0.50 Q dividend equates to $2.00 annually and yields 2.98% at Friday's $67.10 share price.

EMR Gains?

Adding the $2.00 annual estimated dividend to my $2.90 optimistic estimate of Emerson Electric Co's price upside shows a $4.90 potential gross gain, per share, to be reduced by any costs to trade the shares.

Put little over $1,000.00  today in Emerson Electric Co shares at their $67.10 price, buys 15 shares of EMR stock.

A $10 broker fee paid half at purchase and half at sale could cost about $0.67 per share.

Subtract that $0.67 brokerage cost from my estimated $4.90 gross gain per share results in a net gain of $4.33 X 15 shares = $64.95 for a 6.45% net gain on a $1,006.50 investment.

Emerson Electric Co shows a possible 6.45% net gain including a 2.98% dividend yield. It could be more, it could be less.   

The above speculation is based on past performance and supposition. Only time and money invested will tell if Emerson Electric Co is worth it.

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 solicitation, ...

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