EMERSON ELECTRIC CO (EMR) Stock Analysis
EMERSON ELECTRIC CO (EMR) Stock Analysis
Analysis from 10-K filed 2025-11-10. Data as of Q4 2025.
Overall Grade: F (Concerning)
EMERSON ELECTRIC CO faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 11.1% | Near cost of capital |
| FCF Margin | 14.2% | Healthy cash flow |
| Debt/Equity | 0.7x | Moderate leverage |
Investment Thesis: Healthy free cash flow margin of 14.2% provides financial flexibility for growth and shareholder returns.
Explore EMERSON ELECTRIC CO: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: EMERSON ELECTRIC CO earns 11.1% ROIC, Top 50% in Technology
EMERSON ELECTRIC CO's trailing-twelve-month ROIC of 11.1% ranks Top 50% in Technology companies (sector median: 5.2%), driven by NOPAT margin of 18.9% combined with asset turnover of 0.4x. Source: 10-K filed 2025-11-10. Gross margin of 52.8% with operating margin at 24.6% reflects strong pricing power.
| Metric | EMR | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 11.1% | Adequate | Above sector median of 5.2% |
| Return on Equity (ROE) | 11.6% | Adequate | Moderate equity returns |
| Gross Margin | 52.8% | Excellent | Strong pricing power |
| Operating Margin | 24.6% | Excellent | Efficient operations |
Cash Flow: EMERSON ELECTRIC CO generates $2.6B FCF at 14.2% margin, positive NaN/8 quarters
EMERSON ELECTRIC CO generated $2.6B in free cash flow (TTM), a 14.2% FCF margin, a margin that ranks Top 50% in Technology. Operating cash flow exceeds net income by 1.3x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-K filed 2025-11-10.
| Metric | EMR | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 14.2% | Good | Healthy cash generation |
| Free Cash Flow (TTM) | $2.6B | Good | Positive cash generation |
| OCF/Net Income | 1.3x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: EMERSON ELECTRIC CO at 0.7x leverage
EMERSON ELECTRIC CO's debt-to-equity ratio of 0.7x reflects moderate leverage. Total debt of $13.4B offset by $1.7B in cash. Source: 10-K filed 2025-11-10.
| Metric | EMR | Rating | Context |
|---|---|---|---|
| Debt to Equity | 0.7x | Good | Moderate leverage |
| Net Cash Position | $-11.7B | Warning | Net debt position |
Valuation: EMERSON ELECTRIC CO trades at 32.3x earnings
EMERSON ELECTRIC CO trades at a P/E of 32.3x. Free cash flow yield of 3.5% reflects market expectations for growth.
| Metric | EMR | Rating | Context |
|---|---|---|---|
| P/E Ratio | 32.3x | Adequate | Premium valuation |
| EV/Sales | 4.5x | Good | Growth premium priced in |
| FCF Yield | 3.5% | Adequate | Lower cash yield |
| Dividend Yield | 1.6% | Adequate | Growth focus over income |
Capital Allocation: EMERSON ELECTRIC CO returns 2.3% shareholder yield
EMERSON ELECTRIC CO's total shareholder yield is 2.3% (dividends 1.6% + buybacks 0.7%). Source: 10-K filed 2025-11-10.
| Metric | EMR | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 2.3% | Adequate | Dividend + buyback yield combined |
| Buyback Yield | 0.7% | Adequate | Minimal buyback activity |
| Total Capital Returned (TTM) | $1.7B | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 11.1% | Top 50% | 2.1x above |
| Free Cash Flow Margin | 14.2% | Top 50% | 1.6x above |
| Gross Margin | 52.8% | Top 50% | 1.0x above |
| Operating Margin | 24.6% | Top 25% | 5.1x above |
| Return on Equity (ROE) | 11.6% | Top 50% | 2.4x above |
| P/E Ratio | 32.3x | N/A | - |
Financial Scorecard
| Metric | EMR | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 11.1% | Adequate | Top 50% of sector (median: 5.2%) |
| Free Cash Flow Margin | 14.2% | Good | Top 50% of sector (median: 9.1%) |
| Gross Margin | 52.8% | Excellent | Top 50% of sector (median: 51.8%) |
| Debt to Equity Ratio | 66.1% | Good | Moderate leverage |
| P/E Ratio (Price-to-Earnings) | 32.3x | Adequate | Growth premium |
| Free Cash Flow Yield | 3.5% | Adequate | Moderate yield |
Frequently Asked Questions
Q: What is EMERSON ELECTRIC CO's Return on Invested Capital (ROIC)?
EMERSON ELECTRIC CO (EMR) has a trailing twelve-month Return on Invested Capital (ROIC) of 11.1%. This compares above the sector median of 5.2%. An ROIC near 8-12% is approximately the cost of capital for most companies.
Q: What is EMERSON ELECTRIC CO's Free Cash Flow Margin?
EMERSON ELECTRIC CO (EMR) has a free cash flow margin of 14.2%, generating $2.6 billion in free cash flow over the trailing twelve months. A FCF margin between 10-20% represents healthy cash generation for most industries.
Q: Is EMERSON ELECTRIC CO stock overvalued or undervalued?
EMERSON ELECTRIC CO (EMR) trades at a P/E ratio of 32.3x, which is above the sector median of N/A. The EV/Sales multiple is 4.5x. Free cash flow yield is 3.5%, which is in line with market averages.
Q: Does EMERSON ELECTRIC CO pay a dividend?
EMERSON ELECTRIC CO (EMR) currently pays a dividend yield of 1.6%. Including share buybacks, the total shareholder yield is 2.3%. The relatively low yield suggests the company prioritizes growth reinvestment over income distribution.
Q: How much debt does EMERSON ELECTRIC CO have?
EMERSON ELECTRIC CO (EMR) has a debt-to-equity ratio of 0.7x with total debt of $13.4 billion. Net debt position is $11.7 billion.
Q: What is EMERSON ELECTRIC CO's revenue and earnings growth?
EMERSON ELECTRIC CO (EMR) grew revenue by 3.6% year-over-year. Earnings per share decreased by 2.4% compared to the prior year. Modest growth indicates a mature business with stable demand.
Q: Is EMERSON ELECTRIC CO buying back stock?
EMERSON ELECTRIC CO (EMR) repurchased $518.0 million of stock over the trailing twelve months. This represents a buyback yield of 0.7%.
Q: How does EMERSON ELECTRIC CO compare to competitors in Technology?
Compared to other companies in Technology, EMERSON ELECTRIC CO (EMR) shows: ROIC of 11.1% is above the sector median of 5.2% (Top 35%). FCF margin of 14.2% exceeds the sector median of 9.1% (Top 38% of sector). Gross margin at 52.8% is 0.9 percentage points higher than sector peers. These rankings are based on MetricDuck's analysis of all Technology companies with available SEC filings.
Q: What warning signs should I watch for with EMERSON ELECTRIC CO?
EMERSON ELECTRIC CO (EMR) shows no major financial warning signs based on current metrics. However, investors should always monitor: 1) Margin compression trends, 2) Cash flow consistency, 3) Debt levels relative to cash generation, and 4) Changes in competitive positioning.
Data Source: Data sourced from 10-K filed 2025-11-10. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.