Emerson Electric
designs and manufactures a broad range of electrical and electronic products
and systems for commercial, industrial and consumer markets, including
electronic process and measurement equipment, industrial automation equipment,
climate control electronics, network power equipment and appliances and tools.
As you can see, the company has a very well diversified product base and serves
a broad range of both industrial and consumer markets. The company generates an
attractive return on equity (19-25%) and has grown earnings and dividends at a
7-8% pace over the last 10 years. This
high quality, well diversified company should continue to grow as a result of:
(1) a well
diversified product line that is offered to a broad range of industries and can
deliver technology and product solutions globally,
(2) the
company’s continuous investment in breakthrough technologies,
(3) benefit from
global infrastructure building,
(4) an ongoing
cost reduction program,
(5) acquisitions
.
Negatives:
(1) its large
foreign exposure can lead to currency shocks, local economic challenges and
potential delays due to product and shipment disruptions,
(2) weakness in
EU economies,
(3)
restructuring costs.
Statistical Summary
Stock Dividend Payout # Increases
Yield Growth Rate Ratio
Since 2004
Ind Ave 2.0 8
35 NA
Debt/ EPS Down Net
Value Line
Equity ROE
Since 2004 Margin Rating
Ind Ave 25 15 NA 10 NA
Chart
Note:
EMR stock made great progress off its March 2009 low, quickly surpassing the downtrend
off its May 2008 high (straight red line) and the November 2008 trading high
(green line). Long term the stock is in
an uptrend (blue lines); intermediate term it is in an uptrend (purple
lines). The wiggly red line is the 50
day moving average. The Dividend Growth
Portfolio owns a 90% position in EMR and the High Yield Portfolio owns a 75% position. The upper boundary of its Buy Value Range is
$35; the lower boundary of its Sell Half Range is $81.
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