August 31, 2023
Top 10 Stock Emerson Electric Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Emerson Electric – Top 10 Stock in Water Technology
Emerson Electric is listed as a top 10 stock on August 31, 2023 in the market index Water Tech because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 98 (top 98% performer), Obermatt assesses an overall strong buy recommendation for Emerson Electric on August 31, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Electr. Components & Equipment |
| Index | Dividends USA, Water Tech, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Emerson Electric Strong Buy
| 360 METRICS | August 31, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 95 |
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| GROWTH | ||||||||
| GROWTH | 43 |
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| SAFETY | ||||||||
| SAFETY | 70 |
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| SENTIMENT | ||||||||
| SENTIMENT | 100 |
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| 360° VIEW | ||||||||
| 360° VIEW | 98 |
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ANALYSIS: With an Obermatt 360° View of 98 (better than 98% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Emerson Electric are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Emerson Electric. The consolidated Value Rank has an attractive rank of 95, which means that the share price of Emerson Electric is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 95% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 70. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 100. But the consolidated Growth Rank has a low rank of 43, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 57 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 98, Emerson Electric is better positioned than 98% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 95), secure financing practices (Safety Rank of 70), and positive market sentiment in the professional investor community (Sentiment Rank of 100). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 43), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of Emerson Electric is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Emerson Electric very positive
ANALYSIS: With an Obermatt Sentiment Rank of 100 (better than 100% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Emerson Electric is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Emerson Electric. Analyst Opinions are at a rank of 65 (better than 65% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 89, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Emerson Electric. The Professional Investors rank is 99, which means that currently, professional investors hold more stock in this company than in 99% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 60 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 60% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 100 (more positive than 100% compared with investment alternatives), Emerson Electric has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Emerson Electric stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Emerson Electric Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 95 (better than 95% compared with alternatives) for 2023, Emerson Electric shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Emerson Electric. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 69 which means that the stock price compared with what market professionals expect for future profits is lower than for 69% of comparable companies, indicating a good value concerning Emerson Electric's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 60, and for Dividend Yield with a Dividend Yield Rank of 99. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 53% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 47). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 95, is a buy recommendation based on Emerson Electric's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that Emerson Electric has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing Emerson Electric shares. ...read more
Growth Strategy: Emerson Electric Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 43 (better than 43% compared with alternatives), Emerson Electric shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Emerson Electric. Capital Growth has a rank of 71, which means that currently professionals expect the company to grow its invested capital more than 35% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 69 (above 69% of alternative investments). But Sales Growth has only a rank of 21, which means that, currently, professionals expect the company to grow less than 79% of its competitors, and Profit Growth is also low at a rank of 35. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 43, is a hold recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Emerson Electric, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Emerson Electric Debt Financing Safety above-average
| SAFETY METRICS | August 31, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 28 |
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| REFINANCING | ||||||||
| REFINANCING | 59 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 76 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 70 |
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ANALYSIS: With an Obermatt Safety Rank of 70 (better than 70% compared with alternatives), the company Emerson Electric has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Emerson Electric is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Emerson Electric. Refinancing is at 59, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 59% of its competitors. Liquidity is also good at 76, meaning the company generates more profit to service its debt than 76% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 28, which means the company has an above-average debt-to-equity ratio. It has more debt than 72% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 70 (better than 70% compared with alternatives), Emerson Electric has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Emerson Electric could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Emerson Electric Top Financial Performance
| COMBINED PERFORMANCE | August 31, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 95 |
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| GROWTH | ||||||||
| GROWTH | 43 |
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| SAFETY | ||||||||
| SAFETY | 76 |
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| COMBINED | ||||||||
| COMBINED | 90 |
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ANALYSIS: With an Obermatt Combined Rank of 90 (better than 90% compared with investment alternatives), Emerson Electric (Electr. Components & Equipment, USA) shares have much better financial characteristics than comparable stocks. Shares of Emerson Electric are a good value (attractively priced) with a consolidated Value Rank of 95 (better than 95% of alternatives), are safely financed (Safety Rank of 70, which means low debt burdens), but show below-average growth (Growth Rank of 43). ...read more
RECOMMENDATION: A Combined Rank of 90, is a strong buy recommendation based on Emerson Electric's financial characteristics. As the company Emerson Electric's key financial metrics exhibit good value (Obermatt Value Rank of 95) but low growth (Obermatt Growth Rank of 43) while being safely financed (Obermatt Safety Rank of 70), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 95% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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