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Here's Why You Should Invest in Emerson (EMR) Stock Right Now
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Emerson Electric Co. (EMR - Free Report) is thriving on the back of healthy demand across end markets and accretive acquisitions. Also, the company’s shareholder-friendly policies are encouraging.
Let’s delve into the factors that make this current Zacks Rank #2 (Buy) company a smart investment choice at the moment.
Business Strength: Emerson has been experiencing healthy demand across most of its end markets. Solid demand in the process and hybrid markets is boosting underlying orders. The company anticipates sales in the process and hybrid end markets to be robust in fiscal 2024 (ending September 2024), driven by strength in chemical, life sciences, LNG, metals and mining, and sustainability and decarbonization end markets. A strong demand environment and improving supply chains are supporting underlying sales growth.
Within the Intelligent Devices business unit, the company is seeing strength in the measurement, analytical and final control businesses due to strong demand in the hybrid and process end markets. Improved supply chains, easier availability of electronic components and solid backlogs are driving the growth of the Software and Control business group.
Expansion Efforts: Emerson believes in expanding its market presence, solidifying its customer base and enhancing product offerings through acquisitions. In the fourth quarter of fiscal 2023 (ended September 2023), the company completed the acquisitions of Afag and Flexim. The buyout of Afag expands Emerson’s capabilities in factory automation, thus helping it expand into lucrative end markets, which include battery manufacturing, automotive, packaging, medical, life sciences and electronics. The acquisition of Flexim adds to its existing flow measurement positions in coriolis, differential pressure, magmeter and vortex flow measurement and expands its automation portfolio and measurement capabilities.
Also, in October 2023, Emerson completed the buyout of National Instruments for $8.2 billion. The acquisition was in sync with its focus on global automation to drive growth and profitability. The buyout strengthens EMR’s global automation foothold, helping the company expand into high-growth end markets, including semiconductor and electronics, transportation and electric vehicles and aerospace and defense. Apart from broadening automation capabilities, the buyout opens up industrial software opportunities.
Rewards to Shareholders: EMR is committed to rewarding its shareholders handsomely. In the fiscal first quarter, the company paid out dividends of $300 million and repurchased common stocks worth $175 million. In October 2022, it hiked its dividend by 1%. Emerson plans to repurchase shares worth $500 million and pay out dividends of $1.2 billion in fiscal 2024.
Northward Estimate Revision: The Zacks Consensus Estimate for EMR’s fiscal 2024 earnings has been revised 2.3% upward in the past 60 days.
Price Performance: Shares of Emerson have gained 32.2% in the past year.
Image Source: Zacks Investment Research
Other Stocks to Consider
Other top-ranked companies from the Industrial Products sector are discussed below:
ATMU’s earnings estimates have increased 2.9% for 2024 in the past 60 days. Shares of Atmus Filtration have risen 11.5% in the past year.
Tetra Tech, Inc. (TTEK - Free Report) currently carries a Zacks Rank of 2. It delivered a trailing four-quarter average earnings surprise of 14.4%.
In the past 60 days, the Zacks Consensus Estimate for TTEK’s fiscal 2024 earnings has increased 2.9%. The stock has soared 35.6% in the past year.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently has a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 10.4%.
The Zacks Consensus Estimate for AIT’s fiscal 2024 earnings has increased 1.7% in the past 60 days. The stock has gained 30.3% in the past year.
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Here's Why You Should Invest in Emerson (EMR) Stock Right Now
Emerson Electric Co. (EMR - Free Report) is thriving on the back of healthy demand across end markets and accretive acquisitions. Also, the company’s shareholder-friendly policies are encouraging.
Let’s delve into the factors that make this current Zacks Rank #2 (Buy) company a smart investment choice at the moment.
Business Strength: Emerson has been experiencing healthy demand across most of its end markets. Solid demand in the process and hybrid markets is boosting underlying orders. The company anticipates sales in the process and hybrid end markets to be robust in fiscal 2024 (ending September 2024), driven by strength in chemical, life sciences, LNG, metals and mining, and sustainability and decarbonization end markets. A strong demand environment and improving supply chains are supporting underlying sales growth.
Within the Intelligent Devices business unit, the company is seeing strength in the measurement, analytical and final control businesses due to strong demand in the hybrid and process end markets. Improved supply chains, easier availability of electronic components and solid backlogs are driving the growth of the Software and Control business group.
Expansion Efforts: Emerson believes in expanding its market presence, solidifying its customer base and enhancing product offerings through acquisitions. In the fourth quarter of fiscal 2023 (ended September 2023), the company completed the acquisitions of Afag and Flexim. The buyout of Afag expands Emerson’s capabilities in factory automation, thus helping it expand into lucrative end markets, which include battery manufacturing, automotive, packaging, medical, life sciences and electronics. The acquisition of Flexim adds to its existing flow measurement positions in coriolis, differential pressure, magmeter and vortex flow measurement and expands its automation portfolio and measurement capabilities.
Also, in October 2023, Emerson completed the buyout of National Instruments for $8.2 billion. The acquisition was in sync with its focus on global automation to drive growth and profitability. The buyout strengthens EMR’s global automation foothold, helping the company expand into high-growth end markets, including semiconductor and electronics, transportation and electric vehicles and aerospace and defense. Apart from broadening automation capabilities, the buyout opens up industrial software opportunities.
Rewards to Shareholders: EMR is committed to rewarding its shareholders handsomely. In the fiscal first quarter, the company paid out dividends of $300 million and repurchased common stocks worth $175 million. In October 2022, it hiked its dividend by 1%. Emerson plans to repurchase shares worth $500 million and pay out dividends of $1.2 billion in fiscal 2024.
Northward Estimate Revision: The Zacks Consensus Estimate for EMR’s fiscal 2024 earnings has been revised 2.3% upward in the past 60 days.
Price Performance: Shares of Emerson have gained 32.2% in the past year.
Image Source: Zacks Investment Research
Other Stocks to Consider
Other top-ranked companies from the Industrial Products sector are discussed below:
Atmus Filtration Technologies Inc. (ATMU - Free Report) presently carries a Zacks Rank of 2 and a trailing four-quarter earnings surprise of 20.3%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ATMU’s earnings estimates have increased 2.9% for 2024 in the past 60 days. Shares of Atmus Filtration have risen 11.5% in the past year.
Tetra Tech, Inc. (TTEK - Free Report) currently carries a Zacks Rank of 2. It delivered a trailing four-quarter average earnings surprise of 14.4%.
In the past 60 days, the Zacks Consensus Estimate for TTEK’s fiscal 2024 earnings has increased 2.9%. The stock has soared 35.6% in the past year.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently has a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 10.4%.
The Zacks Consensus Estimate for AIT’s fiscal 2024 earnings has increased 1.7% in the past 60 days. The stock has gained 30.3% in the past year.