Emerson Electric Company
🇺🇸 EMR · NYSE/NASDAQ · US2910111044
Industrials
USD 131.70 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
32.2
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 131.70 ÷ 4.09 = 32.2
TTM period through: 2025-12-31
Forward P/E (estimated): 20.2
Based on analyst estimates
Reference: Provider P/E (Trailing): 32.3
Yield (Fwd)
1.69%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 1.62%
Net Debt/EBITDA (TTM)
2.4x
Latest quarter: 9.7x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-12-31
Latest quarter (2025-12-31): 9.7x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
54.2%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 52.0%
Cash Flow Payout (TTM): 39.8%
FCF Coverage (TTM): 2.14x
ROE
9.7%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
17.7x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
Emerson Electric is a high-quality global leader in industrial automation with an exceptionally safe dividend backed by robust free cash flow. While the underlying business remains fundamentally strong with expanding backlogs, the current valuation offers limited upside. Existing shareholders should maintain positions given the secure payout, but new investors should wait for a more attractive entry point with a higher yield.
Sector Context
Emerson Electric is a global technology and engineering company that provides solutions for industrial, commercial, and residential markets, focusing heavily on automation and the energy transition. In the context of dividend investing, industrial equipment providers can be sensitive to capital expenditure cycles, but high-quality leaders like Emerson offer long-term stability and consistent cash flow generation to support dividends despite economic fluctuations.
📊 Strategy Analysis
- • Maintains an exceptionally safe dividend with a cash flow payout ratio of 39.8% and a strong Free Cash Flow dividend coverage ratio of 2.14x.
- • Perfect 10-year dividend consistency score with no cuts, reflecting a resilient business model and strong commitment to shareholder returns.
- • Solid balance sheet with a Net Debt/EBITDA of 2.44x, operating comfortably below the strategy's conservative 3.0x threshold.
⚠ What to Watch
- • Current valuation is highly elevated with a TTM P/E of 32.17x, significantly exceeding the strategy's target range of 8-15x.
- • The dividend yield of 1.62% falls well below the minimum >3% threshold required for optimal dividend income strategies.
- • Current trading price of $131.70 substantially exceeds the fair value monopoly upper bound estimate of $73.70, offering no margin of safety.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-04
Disclaimer: This information is for educational purposes only. Not financial advice.