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Yahoo
02-05-2025
- Business
- Yahoo
Emerson Electric Co. (EMR): Among Billionaire Ken Fisher's Industrial Stock Picks with Huge Upside Potential
We recently published a list of . In this article, we are going to take a look at where Emerson Electric Co. (NYSE:EMR) stands against other billionaire Ken Fisher's industrial stock picks with huge upside potential. The economy strongly influences industrial stocks, which have fallen during recent downturns. However, 2025 looks like a key year for this sector, with these companies working in manufacturing, shipping, and aerospace, and investors are now focusing on businesses that adapt quickly to global shifts. The industrial sector grew 26% in 2024, showing strength despite high inflation and weak global demand. Going into 2025, these stocks are getting more attention thanks to new growth drivers and better economic conditions. Even with possible higher tariffs under Trump's trade policies, the outlook remains positive. President Trump has proposed a 25% tariff on steel and aluminum from countries like South Korea, Vietnam, and Canada. These tariffs might raise costs and also boost U.S. infrastructure and manufacturing spending; as Canada's Innovation Minister Francois-Philippe Champagne said, 'Canadian steel and aluminum support key industries in the U.S., from defense, shipbuilding, and auto. We will continue to stand up for Canada, our workers, and our industries.' All in all, this trade shift could help American industrial companies, especially those bringing supply chains back home. Moreover, lower interest rates should help the sector by increasing construction and housing projects in 2025. On the other hand, falling mortgage rates will attract more homebuyers, creating demand for building materials and equipment. Ken Fisher said, 'Investors are ignoring some of these positive developments,' pointing to an overlooked chance in housing-related businesses. Aerospace is also making a comeback through airlines' need to replace aging planes, driving demand for maintenance and parts, which demonstrates significant progress in aerospace-based companies. Meanwhile, only 25% of the $1.9 trillion in planned North American infrastructure projects have started construction, suggesting big growth ahead for equipment providers and construction companies. In 2025, industrial stocks look promising due to clean technology and automation advancements. As reported in Deloitte's 2025 Manufacturing Industry Outlook, over $31 billion went into clean-tech manufacturing facilities in 2024, showing a move toward sustainability. With decreasing interest rates and high demand for environmentally friendly tech, these investments are highly probable to drive growth in the industry. Ken Fisher noted made the following comment about the current situation: 'The fear is bigger than the problem can be. Single-period stock market comparisons are always iffy, but it may well be this goes something like the 1998 stock market correction leading to a 26% annual return.' His view suggests a more positive review of the industrial sector, predicting it will grow despite tariff concerns. With investments in automation, clean tech, and domestic production, these stocks have strong long-term potential even with short-term challenges. To compile this list, we reviewed Ken Fisher's SEC Q4 2024 13F filings. We picked 10 stocks with the highest upside potential from their current levels as of time of writing this article. Finally, we ranked the stocks in ascending order based on their highest analyst upside potential while also outlining hedge fund sentiment regarding these stocks, as per Insider Monkey's database of Q4 2024. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here). Engineers analyzing a complex network of process control software and systems. Number of Hedge Fund Holders: 41 Upside Potential: 22.01% Emerson Electric Co. (NYSE:EMR) develops automation technology and software for industries such as process control, discrete manufacturing, instrumentation, and asset management. Working through seven specialized divisions, the company tackles global needs for energy efficiency and digital transformation. For Q1 2025 ended December 31, 2024, Emerson beat earnings forecasts with $1.38 per share, above the $1.28 analysts expected. Emerson Electric Co. (NYSE:EMR) achieved record gross margins of 53.5% and adjusted segment EBITDA margins of 28%, up 340 basis points from last year. The company's free cash flow nearly doubled to $694 million thanks to cost-cutting and better margins. Although its discrete business fell 4%, while process and hybrid segments grew 5%, and software and control rose 4%. Emerson Electric also bought back $1 billion in shares during the quarter. Moreover, Emerson saw strong results in the US and the Middle East, but China remained weak, especially in manufacturing and chemicals. Emerson Electric Co. (NYSE:EMR) built up an $11.5 billion project pipeline and continues its focus on LNG, power, and semiconductor markets as key growth areas. It expects over $1 billion in future LNG orders and added $300 million in semiconductor opportunities. The company's growth plans include acquiring AspenTech and opening a new headquarters in St. Louis. Despite some regional challenges, Emerson Electric Co. (NYSE:EMR) remains a solid industrial tech investment due to strong cash flow and growing digital offerings. Ken Fisher owns about $252.3 million in Emerson shares, making up 0.1% of his fund's holdings. The company aims for high-70% operating leverage (up from mid-40% last year) and plans to return $3.2 billion to shareholders through dividends and buybacks. Overall, EMR ranks 7th on our list of billionaire Ken Fisher's industrial stock picks with huge upside potential. While we acknowledge the potential of EMR, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than EMR but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
01-05-2025
- Business
- Yahoo
Emerson Electric Co. (EMR): Among Billionaire Ken Fisher's Industrial Stock Picks with Huge Upside Potential
We recently published a list of . In this article, we are going to take a look at where Emerson Electric Co. (NYSE:EMR) stands against other billionaire Ken Fisher's industrial stock picks with huge upside potential. The economy strongly influences industrial stocks, which have fallen during recent downturns. However, 2025 looks like a key year for this sector, with these companies working in manufacturing, shipping, and aerospace, and investors are now focusing on businesses that adapt quickly to global shifts. The industrial sector grew 26% in 2024, showing strength despite high inflation and weak global demand. Going into 2025, these stocks are getting more attention thanks to new growth drivers and better economic conditions. Even with possible higher tariffs under Trump's trade policies, the outlook remains positive. President Trump has proposed a 25% tariff on steel and aluminum from countries like South Korea, Vietnam, and Canada. These tariffs might raise costs and also boost U.S. infrastructure and manufacturing spending; as Canada's Innovation Minister Francois-Philippe Champagne said, 'Canadian steel and aluminum support key industries in the U.S., from defense, shipbuilding, and auto. We will continue to stand up for Canada, our workers, and our industries.' All in all, this trade shift could help American industrial companies, especially those bringing supply chains back home. Moreover, lower interest rates should help the sector by increasing construction and housing projects in 2025. On the other hand, falling mortgage rates will attract more homebuyers, creating demand for building materials and equipment. Ken Fisher said, 'Investors are ignoring some of these positive developments,' pointing to an overlooked chance in housing-related businesses. Aerospace is also making a comeback through airlines' need to replace aging planes, driving demand for maintenance and parts, which demonstrates significant progress in aerospace-based companies. Meanwhile, only 25% of the $1.9 trillion in planned North American infrastructure projects have started construction, suggesting big growth ahead for equipment providers and construction companies. In 2025, industrial stocks look promising due to clean technology and automation advancements. As reported in Deloitte's 2025 Manufacturing Industry Outlook, over $31 billion went into clean-tech manufacturing facilities in 2024, showing a move toward sustainability. With decreasing interest rates and high demand for environmentally friendly tech, these investments are highly probable to drive growth in the industry. Ken Fisher noted made the following comment about the current situation: 'The fear is bigger than the problem can be. Single-period stock market comparisons are always iffy, but it may well be this goes something like the 1998 stock market correction leading to a 26% annual return.' His view suggests a more positive review of the industrial sector, predicting it will grow despite tariff concerns. With investments in automation, clean tech, and domestic production, these stocks have strong long-term potential even with short-term challenges. To compile this list, we reviewed Ken Fisher's SEC Q4 2024 13F filings. We picked 10 stocks with the highest upside potential from their current levels as of time of writing this article. Finally, we ranked the stocks in ascending order based on their highest analyst upside potential while also outlining hedge fund sentiment regarding these stocks, as per Insider Monkey's database of Q4 2024. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here). Engineers analyzing a complex network of process control software and systems. Number of Hedge Fund Holders: 41 Upside Potential: 22.01% Emerson Electric Co. (NYSE:EMR) develops automation technology and software for industries such as process control, discrete manufacturing, instrumentation, and asset management. Working through seven specialized divisions, the company tackles global needs for energy efficiency and digital transformation. For Q1 2025 ended December 31, 2024, Emerson beat earnings forecasts with $1.38 per share, above the $1.28 analysts expected. Emerson Electric Co. (NYSE:EMR) achieved record gross margins of 53.5% and adjusted segment EBITDA margins of 28%, up 340 basis points from last year. The company's free cash flow nearly doubled to $694 million thanks to cost-cutting and better margins. Although its discrete business fell 4%, while process and hybrid segments grew 5%, and software and control rose 4%. Emerson Electric also bought back $1 billion in shares during the quarter. Moreover, Emerson saw strong results in the US and the Middle East, but China remained weak, especially in manufacturing and chemicals. Emerson Electric Co. (NYSE:EMR) built up an $11.5 billion project pipeline and continues its focus on LNG, power, and semiconductor markets as key growth areas. It expects over $1 billion in future LNG orders and added $300 million in semiconductor opportunities. The company's growth plans include acquiring AspenTech and opening a new headquarters in St. Louis. Despite some regional challenges, Emerson Electric Co. (NYSE:EMR) remains a solid industrial tech investment due to strong cash flow and growing digital offerings. Ken Fisher owns about $252.3 million in Emerson shares, making up 0.1% of his fund's holdings. The company aims for high-70% operating leverage (up from mid-40% last year) and plans to return $3.2 billion to shareholders through dividends and buybacks. Overall, EMR ranks 7th on our list of billionaire Ken Fisher's industrial stock picks with huge upside potential. While we acknowledge the potential of EMR, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than EMR but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
26-04-2025
- Business
- Yahoo
Emerson Electric Co. (EMR): Among the Growing Dividend Stocks with Low PE Ratios
We recently published a list of the . In this article, we are going to take a look at where Emerson Electric Co. (NYSE:EMR) stands against other growing dividend stocks. Value stocks are enjoying a rare period of strength amid this year's broader market downturn. With earnings season approaching, it remains to be seen whether their recent edge over high-growth stocks will hold. The S&P Value Index—which includes sectors like banking, consumer staples, and healthcare, featuring companies that trade at relatively low valuations—has fallen around 9% this year. That's a smaller drop compared to the more than 15% decline seen in the growth-focused counterpart. Concerns over steep valuations in the tech sector, coupled with a wave of risk aversion triggered by tariffs, have pushed investors to shift from growth to value. While similar shifts haven't lasted long in the past, some investors believe that this time could be different, as expectations for value-oriented firms are modest enough that they may exceed them when earnings reports begin next month. Dan Morgan, senior portfolio manager at Synovus Trust, made the following comment about value investing: 'The bar has been set pretty low for value stocks compared to the uncertainty surrounding growth names and their ability to deliver on earnings estimates. If value can at least match or slightly beat expectations, the runway is clear for them.' According to data from Bloomberg Intelligence, analysts are forecasting a 12% decline in first-quarter earnings for value companies compared to the same period last year, while growth companies are expected to post a 20% increase. Supporters of value stocks believe that these lower expectations are already factored into their relatively modest valuations. On the other hand, optimism surrounding growth stocks—particularly in the tech sector—has soared in recent years, largely driven by enthusiasm over advancements in artificial intelligence. Historically, value stocks have lagged behind. Over the past 20 years, the S&P 500 Value Index has only outperformed its growth counterpart five times on an annual basis. During that period, the value index climbed 202%, while the growth index surged by 600%. Michael O'Rourke, chief market strategist at JonesTrading Institutional Services, made the following statement: 'Growth is about 40% more expensive; this outperformance of value was very long overdue. Due to the incredible strength of the Magnificent Seven, too many investors crowded into growth thinking it won't correct.' Investors often turn to dividend stocks when looking at companies with lower valuations. Dan Lefkovitz, a strategist at Morningstar Indexes, pointed out that dividend-growth stocks—those known for consistently raising their payouts—have underperformed the broader market in 2024. He attributed this to a market that has largely been driven by a handful of fast-growing tech names. However, he also remarked that while dividend-paying stocks may trail during such growth-led rallies, they tend to hold up better during market downturns, as seen in 2022 and 2018. Companies that consistently raise their dividends are often both profitable and financially stable—traits that become especially important during times of economic downturn. Engineers analyzing a complex network of process control software and systems. For this list, we focused on dividend-paying companies that have consistently paid dividends over the years and have also demonstrated a track record of increasing their payouts. From that group, we considered stocks with forward P/E ratios below 25, as of April 22. The stocks are ranked in ascending order of their P/E ratios. At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (). Forward P/E Ratio as of April 22: 16.21 Emerson Electric Co. (NYSE:EMR) ranks 19th on our list of the best growing dividend stocks. The American multinational manufacturing company offers products and services related to commercial, industrial, and consumer markets. Over the past five years, the company has actively reshaped its business strategy through a series of acquisitions and divestitures to align with evolving market trends. In the third quarter of fiscal 2024, Emerson Electric Co. (NYSE:EMR) reported a notable increase in operating cash flow, reaching $1.06 billion compared to $842 million in the same quarter the year before. Free cash flow also saw an uptick, rising to $975 million from $769 million year-over-year. For fiscal 2024, Emerson anticipates distributing around $1.2 billion to shareholders via dividends. Given its current cash reserves, the company also appears well-positioned for continued dividend growth moving forward. Emerson Electric Co. (NYSE:EMR)'s quarterly dividend comes in at $0.5275 per share and has a dividend yield of 2.11%, as of April 22. The company holds one of the longest dividend growth streaks in the market, spanning 67 years. Overall, EMR ranks 19th on our list of the best growing dividend stocks with low P/E ratios. While we acknowledge the potential of EMR as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than EMR but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the . READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at . Sign in to access your portfolio
Yahoo
13-04-2025
- Business
- Yahoo
Emerson Electric (NYSE:EMR) stock performs better than its underlying earnings growth over last five years
It hasn't been the best quarter for Emerson Electric Co. (NYSE:EMR) shareholders, since the share price has fallen 15% in that time. On the other hand the returns over the last half decade have not been bad. It's good to see the share price is up 99% in that time, better than its market return of 98%. On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time. During five years of share price growth, Emerson Electric achieved compound earnings per share (EPS) growth of 0.4% per year. This EPS growth is lower than the 15% average annual increase in the share price. This suggests that market participants hold the company in higher regard, these days. That's not necessarily surprising considering the five-year track record of earnings growth. The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers). This free interactive report on Emerson Electric's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further. It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Emerson Electric the TSR over the last 5 years was 123%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return. While the broader market gained around 5.1% in the last year, Emerson Electric shareholders lost 9.2% (even including dividends). However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 17% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. If you would like to research Emerson Electric in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company. If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
08-02-2025
- Business
- Yahoo
Emerson Electric (NYSE:EMR) Will Pay A Dividend Of $0.5275
Emerson Electric Co. (NYSE:EMR) has announced that it will pay a dividend of $0.5275 per share on the 10th of March. Despite this raise, the dividend yield of 1.7% is only a modest boost to shareholder returns. See our latest analysis for Emerson Electric Even a low dividend yield can be attractive if it is sustained for years on end. Prior to this announcement, Emerson Electric's dividend was comfortably covered by both cash flow and earnings. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth. Over the next year, EPS is forecast to expand by 65.8%. If the dividend continues along recent trends, we estimate the payout ratio will be 36%, which is in the range that makes us comfortable with the sustainability of the dividend. The company has a sustained record of paying dividends with very little fluctuation. Since 2015, the dividend has gone from $1.72 total annually to $2.11. This implies that the company grew its distributions at a yearly rate of about 2.1% over that duration. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive. Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Although it's important to note that Emerson Electric's earnings per share has basically not grown from where it was five years ago, which could erode the purchasing power of the dividend over time. Growth of 0.4% per annum is not particularly high, which might explain why the company is paying out a higher proportion of earnings. This could mean the dividend doesn't have the growth potential we look for going into the future. Overall, a dividend increase is always good, and we think that Emerson Electric is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity. Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 1 warning sign for Emerson Electric that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
