Emerson Electric Co. Stock Buy Recommendation Reiterated (EMR)

Editor's Note: 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.

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, increase in stock price during the past year, expanding profit margins, good cash flow from operations and increase in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

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Highlights from the ratings report include:
  • EMR's revenue growth has slightly outpaced the industry average of 0.6%. Since the same quarter one year prior, revenues slightly increased by 4.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • 42.40% is the gross profit margin for EMERSON ELECTRIC CO which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 8.17% is above that of the industry average.
  • Net operating cash flow has significantly increased by 65.86% to $554.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 18.79%.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electrical Equipment industry. The net income increased by 22.4% when compared to the same quarter one year prior, going from $371.00 million to $454.00 million.

Emerson Electric Co., a diversified technology company, engages in designing and supplying products and technology, and providing engineering services and solutions to the industrial, commercial, and consumer markets worldwide. Emerson Electric has a market cap of $40.27 billion and is part of the industrial goods sector and industrial industry. The company has a P/E ratio of 20, above the S&P 500 P/E ratio of 17.7. Shares are up 5.3% year to date as of the close of trading on Tuesday.

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.

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