Tuesday, October 27, 2015

Emerson Electric: Short-Term Headwinds Make For Attractive Long-Term Returns


Investing in dividend aristocrats has long led to solid and stable returns for investors. What's not to like about getting a raise that beats inflation year after year just for owning an excellent company. However, just because a company has grown its dividend like clockwork doesn't mean that the shares are currently offering value. It's been far too long since I did a full in-depth analysis of Emerson Electric (NYSE:EMR), and the 20% decline in EMR's share price brought it to my attention. Shares of Emerson Electric closed trading on Friday, October 23rd at $48.18, giving investors a current yield of 3.90%.

The following tables/graphs are taken from my personal stock analysis spreadsheet. Data for the stock analysis was sourced from Emerson Electric Co.'s investor relations page, Morningstar, and Yahoo Finance.

Historical Growth Rates:

Owners of Emerson Electric shares have earned sub-par returns over the last decade. According to longrundata.com, the shares have earned investors a total return of 86.0%, or 6.4% annualized, over the last decade. Those numbers are market returns at specific snapshots in time, and aren't necessarily indicative of the business results over the same time period. Looking at the historical growth rates for per share dividends, earnings, revenue, and free cash flow gives a better idea of the true operational results that the company has delivered.

Continue reading the Emerson Electric Co. stock analysis on Seeking Alpha.

Also check out my Stock Analysis page to see more analyses.

Image sourced from Wikipedia.

2 comments:

  1. Three point nine is a very tasty yield. I hope they manage to buy back a ton of shares while the price is depressed.

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  2. Thanks for sharing nice post i will share this
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