Emerson Electric Co. Stock Buy Recommendation Reiterated (EMR)

NEW YORK (TheStreet) -- Emerson Electric (NYSE:EMR) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, growth in earnings per share, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

• ACTIVE STOCK TRADERS: Check out TheStreet's special offer for Real Money, headlined by Jim Cramer, now!

Highlights from the ratings report include:

• EMR's revenue growth has slightly outpaced the industry average of 2.5%. Since the same quarter one year prior, revenues slightly increased by 1.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
• The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Electrical Equipment industry and the overall market, EMERSON ELECTRIC CO's return on equity exceeds that of both the industry average and the S&P 500.
• EMERSON ELECTRIC CO's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, EMERSON ELECTRIC CO increased its bottom line by earning $3.24 versus $2.60 in the prior year. This year, the market expects an improvement in earnings ($3.35 versus $3.24).
• 41.90% is the gross profit margin for EMERSON ELECTRIC CO which we consider to be strong. Regardless of EMR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, EMR's net profit margin of 9.20% compares favorably to the industry average.
• Despite currently having a low debt-to-equity ratio of 0.56, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.93 is weak.

Emerson Electric Co. operates as a diversified technology company worldwide. It engages in designing and supplying products and technology, and delivering engineering services and solutions to industrial, commercial, and consumer markets. The company has a P/E ratio of 14.6, above the average industrial industry P/E ratio of 14.5and below the S&P 500 P/E ratio of 17.7. Emerson Electric has a market cap of $33.45 billion and is part of the industrial goods sector and industrial industry. Shares are up 0.2% year to date as of the close of trading on Thursday.

You can view the full Emerson Electric Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

For more information on Emerson Electric Co. click any of the following:

• Emerson Electric Co. Stock Price

• Emerson Electric Co. Analyst Ratings

• Emerson Electric Co. Key Stats & Profile

• Emerson Electric Co. Earnings

• Emerson Electric Co. Ratio Comparison

• Emerson Electric Co. Growth Rates

• Emerson Electric Co. Balance Sheet

• Emerson Electric Co. Cash Flow

• Emerson Electric Co. Income Statement