Want to jump straight to the answer? According to our experts, Emerson Electric stock is a good investment with an investment grade rating of 3.3/5 based on the trading styles of Value, Growth, and Momentum.
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Emerson Electric (EMR) is a big conglomerate with multi-industrial operations, focusing primarily in automation solutions, and commercial and residential solutions. More specifically, EMR offers process management solutions, such as control valves, transmitters and automation systems, with this arm of its operations being extremely popular in China where it has recorded impressive sales growth figures.EMR's commercial and residential solutions segment centres around climate technologies, primarily HVAC and refrigeration products and services, equipping many households with popular products such as garbage disposal systems and thermostats. Due to the popularity of its products and solutions, EMR is projecting an annual revenue growth of 12% to 14% in its commercial and residential division for 2021.
Emerson Electric is considered a very good dividend stock and an attractive choice for investors seeking to invest in the industrials sector, since it has a lot going for it. There are many arguments in favour of this position, such as the fact EMR’s free cash flow can comfortably cover healthy dividend payouts, while its management has shown resilience, especially during the COVID crisis. Moreover, the solid balance sheet allowed the management to proceed with successful acquisition in the smart technology field, while such moves are set to continue in the future to further boost growth. Finally, due to its exposure to oil prices, the EMR stock can be said to be undervalued, which makes it a good investment.
The fact that EMR maintains a health free cash flow, allowing it the ability to keep meeting its dividend payments, irrespective of pressure or even declines in sales and earnings, is testament to the company’s healthy status and the resilience and ability of its management, who have managed to effectively cut their general and administrative costs, thus achieving their FCF targets.
Although EMR may be vulnerable as other industrial stocks, to the fact that their sales can be cyclical and are somewhat dependent on spending from heavy industries like oil and gas, chemical, power, and mining, the fact remains that it has demonstrated remarkable resilience, while increased sales which are expected in the post-COVID recovery period, paint an optimistic picture for the future.
The management of EMR has shown a strong commitment to making smart acquisitions to further consolidate and strengthen their company’s market position. Through the purchase of the Intelligent Platforms business of General Electric in 2019, cloud-connected controllers and smart-plant devices were added to Emerson's range of automation solutions. Following this, a series of other buyouts came through, such as the acquisitions of Verdant in March 2020, the American Governor Company in April 2020, the Progea Group in October 2020 and 7AC Technologies in November 2020, of which grow the capabilities of EMR and add to its competitive advantage by capitalizing on new digital technologies, which will only help EMR grow stronger and bigger.
Even when faced with a decline in sales, as it did in 2014, EMR is a relatively mature company, whose sales growth tends to go hand in hand with general economic growth, while through various methods, such as controlling its costs, it has almost always managed to increase its operating income.
Over the past decade, EMR shares have provided a good return to stock holders, while its good financial standing, with enough current assets available to comfortably cover all near-term liabilities, fortify it against economic hardship. Moreover, the fact that Emerson Electric EMR is in a position to weather out any crisis, which could bring smaller competitors to their demise, means that there are also long-term positive opportunities for EMR to further increase its market share.
* The prediction figures outline some of the Potential high and low of Emerson Electric shares price prediction forecasts for the years 2021, 2022, and 2025 based on the data collected from various sources meant strictly for educational purposes only and not taken as investment advice.
By the end of the year 2021, using forecast and algorithmic analysis, our price prediction forecasts suggest that one Emerson Electric share will reach an average price of $107.205, which will be an impressive 109% growth from it's current market price.
By the end of the year 2022, our price prediction forecasts suggest that one Emerson Electric share will reach an average price of $102.25, which will be an impressive 104% growth from it's current market price.
By the end of the year 2025, our price prediction forecast suggests that one Emerson Electric share will reach an average price of $118.34, which will be an impressive 120% growth from it's current market price.
There are several online sites and platforms where people from across the globe can buy Emerson Electric at good exchange rates and with low or no transaction fees. To aid your quest we have comprised a list of some of the most popular methods and platforms to buy Emerson Electric from and your strongly advised to consult this list before making your first purchase of or investment in Emerson Electric.
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The EMR stock appears to be a smart choice for investors at the moment, while its future outlook also appears positive. This position is based on Emerson’s proven strength in its end markets, since the company demonstrates consistent strength across several sectors and fields of its activities, allowing it to record top-level performance. The positive outlook for EMR is further supported by estimated revisions by industry analysts on the company’s earnings for 2021 and 2022, where the consensus view is that the upward trend is set to continue. Further testament to the positive outlook, is EMR’s demonstrated commitment to keep rewarding its shareholders both through share buybacks as well as strong dividend payouts. In 2020 alone, and though this was a difficult year due to COVID, EMR repurchased shares worth $942 million and paid dividends worth $1,209 million.
There is no guarantee that you will make a profit when you invest in Emerson Electric. However, to give yourself the best chance possible we have hand-picked the three most valuable such strategies, which you can find below:
Raytheon Technologies came about in April 2020, as a result of a merger between two historic companies with a long presence in the industrial sector. Raytheon Company, established in 1922 and United Technologies, founded in 1934, both holding dominant positions in the industrial sector for many years, combined to form a company that now has a distinct presence across several subsectors of the industry.
3M is a true giant and a champion at diversification. In fact, besides its operations in the industrials sector, this company has a strong presence in various other sectors, such as transportation and electronics, technology, health care, and consumer goods.
There are two valid overall conclusions to be made after closely examining the EMR stock, which are very useful for interested investors to be aware of and factor in when deciding whether to add EMR to their investment portfolio. The first is that EMR appears to currently be a discounted stock, as concerns over its exposure to energy prices, tend to push its pricing downwards. In fact, Emerson's FCF-based valuation, with a market cap of $38.5 million and trading at just 17 times its estimated 2020 FCF, does prove that EMR is currently relatively cheap and stands to further benefit from any future upside to the energy market.
The second conclusion is that EMR is indeed a good buy for dividend-seeking investors as strong dividend payments appear to be comfortably sustainable for the foreseeable, aided by the company’s management demonstrating a strong commitment to continue investing in further growth, especially through further acquisitions. Emerson thus emerges as a definite stock to pay attention to and keep on your watchlist, as when evaluated on a risk-reward basis, the outcome is positive and the outlook is optimistic.
In this guide, the aim wasn’t only to answer simple questions like “how to buy Emerson Electric ?” or “where to buy Emerson Electric ?”. Instead, the goal was to equip you with the relevant knowledge and insight to be able to see and understand the bigger picture as well as make your Emerson Electric investment journey as successful and as profitable as possible!