Emerson Electric Co (NYSE: EMR)

Sector: Industrials Industry: Specialty Industrial Machinery CIK: 0000032604
Market Cap 111.68 Bn
P/B 10.96
P/E 47.10
P/S 4.65
ROIC (Qtr) 7.58
Div Yield % 1.34
Rev 1y % (Qtr) 4.10
Total Debt (Qtr) 13.41 Bn
Debt/Equity (Qtr) 0.66
Add ratio to table...

About

Emerson Electric Co., known by its ticker symbol EMR, is a global technology and software company that operates in the industry of providing innovative solutions for customers across various end markets worldwide. The company, which was incorporated in Missouri in 1890, has grown and evolved through internal growth and strategic acquisitions. Emerson's main business activities center on providing automation solutions, software, and services to process, hybrid, and discrete manufacturers. Emerson's operations span across multiple segments, including...

Read more

Investment thesis

Bull case

  • Operating cash flow of 3.02B provides strong 12.08x coverage of stock compensation 250M, indicating sustainable incentive practices.
  • Robust free cash flow of 2.58B exceeds capital expenditure of 445M by 5.79x, indicating strong organic growth funding capability.
  • Retained earnings of 40.87B provide full 5.40x coverage of long-term debt 7.58B, indicating strong internal capital position.
  • Tangible assets of 14.55B provide robust 4.35x coverage of other current liabilities 3.35B, indicating strong asset backing.
  • Retained earnings of 40.87B provide strong 12.20x coverage of other current liabilities 3.35B, indicating earnings quality.

Bear case

  • Operating cash flow of 3.02B barely covers its investment activities of (576M), with a coverage ratio of -5.24, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 3.02B provides thin coverage of dividend payments of (1.20B) with a -2.51 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Operating earnings of 3.31B show weak coverage of depreciation charges of 1.49B, with a 2.22 ratio indicating high capital intensity and potential reinvestment needs.
  • High financing cash flow of (3.58B) relative to working capital of (1.68B), which is 2.14x suggests concerning dependence on external funding for operational needs.
  • High depreciation of 1.49B relative to operating cash flow of 3.02B, which is 0.49x suggests significant maintenance capital requirements affecting free cash flow.

Segments Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Specialty Industrial Machinery
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GEV GE Vernova Inc. 224.93 Bn 194.57 6.14 0.00 Bn
2 ETN Eaton Corp plc 153.13 Bn 38.99 5.75 11.22 Bn
3 PH Parker-Hannifin Corp 135.87 Bn 165.29 12.09 9.87 Bn
4 EMR Emerson Electric Co 111.68 Bn 47.10 4.65 13.41 Bn
5 ITW Illinois Tool Works Inc 86.68 Bn 28.27 5.40 8.97 Bn
6 CMI Cummins Inc 82.13 Bn 28.89 2.44 7.55 Bn
7 AME Ametek Inc/ 53.79 Bn 36.34 7.27 2.28 Bn
8 ROK Rockwell Automation, Inc 43.80 Bn 44.24 5.11 3.68 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.74 2.28
EV to Cash from Ops. EV/CFO 35.39 37.14
EV to Debt EV to Debt 8.57 34.39
EV to EBIT EV/EBIT 31.31 27.71
EV to EBITDA EV/EBITDA 25.28 25.34
EV to Free Cash Flow [EV/FCF] EV/FCF 45.03 133.36
EV to Market Cap EV to Market Cap 1.03 1.04
EV to Revenue EV/Rev 4.79 39.88
Price to Book Value [P/B] P/B 10.96 6.22
Price to Earnings [P/E] P/E 47.10 143.63
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.92 2.57
Dividend Payout Ratio % Div Payout % (Qtr) 52.00 15.73
Dividend per Basic Share Div per Share (Qtr) 2.14 0.91
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 46.67 82.53
Interest Coverage Int. cover (Qtr) 10.42 12.34
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -4.71 -45.99
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -38.32 118.48
Dividend Growth (1y) % Div 1y % (Qtr) 1.71 10.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 1.37 -283.03
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 4.22 -36.87
EBIT Growth (1y) % EBIT 1y % (Qtr) 5.78 -80.72
EBT Growth (1y) % EBT 1y % (Qtr) 0.07 -120.93
EPS Growth (1y) % EPS 1y % (Qtr) -2.84 -39.22
FCF Growth (1y) % FCF 1y % (Qtr) -21.23 85.55
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 4.24 0.87
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.43 0.62
Cash Payout Ratio Cash Payout (Qtr) 0.35 0.10
Cash Ratio Cash Ratio (Qtr) 0.17 3.01
Current Ratio Curr Ratio (Qtr) 0.84 4.97
Debt to Equity Ratio Debt/Equity (Qtr) 0.66 0.38
Interest Cover Ratio Int Coverage (Qtr) 10.42 12.34
Times Interest Earned Times Interest Earned (Qtr) 10.42 12.34
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 26.40 -7,291.27
EBIT Margin % EBIT Margin % (Qtr) 18.21 -7,413.30
EBT Margin % EBT Margin % (Qtr) 16.46 -9,015.79
Gross Margin % Gross Margin % (Qtr) 52.80 -32.61
Net Profit Margin % Net Margin % (Qtr) 12.70 -7,962.06