Reviewing Emerson Electric Co. (EMR)’s and AO Smith Corporation (NYSE:AOS)’s results – D Minute

Emerson Electric Co. (NYSE:EMR) and A. O. Smith Corporation (NYSE:AOS) compete with each other in the Industrial Electrical Equipment sector. We will analyze and compare their dividends, analyst recommendations, profitability, risk, institutional ownership, earnings and valuation.

Earnings and Valuation

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Emerson Electric Co. 17.74B 2.34 2.28B 3.21 21.20
A. O. Smith Corporation 3.19B 2.69 444.20M 2.58 20.34

Table 1 shows top-line revenue, earnings per share and valuation of the two companies. A. O. Smith Corporation appears to has lower revenue and earnings than Emerson Electric Co. The company with a higher price-to-earnings ratio is currently more expensive of the two stocks. Emerson Electric Co.’s current price-to-earnings ratio is higher than that of A. O. Smith Corporation, which means that it is the expensive of the two.

Profitability

Table 2 has Emerson Electric Co. and A. O. Smith Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Emerson Electric Co. 12.85% 26.7% 11.2%
A. O. Smith Corporation 13.92% 25.7% 14.5%

Volatility & Risk

Emerson Electric Co. has a beta of 1.23 and its 23.00% more volatile than S&P 500. Competitively, A. O. Smith Corporation’s beta is 1.38 which is 38.00% more volatile than S&P 500.

Liquidity

Emerson Electric Co.’s Current Ratio is 0.9 while its Quick Ratio is 0.6. On the competitive side is, A. O. Smith Corporation which has a 2.1 Current Ratio and a 1.7 Quick Ratio. A. O. Smith Corporation is better positioned to pay off short and long-term obligations compared to Emerson Electric Co.

Dividends

Emerson Electric Co. pays out its dividends annually at $1.95 per share and 2.92% dividend yield. A. O. Smith Corporation also pays out annual dividends at $0.76 per share and at a 1.49% dividend yield.

Analyst Recommendations

The table given features the ratings and recommendations for Emerson Electric Co. and A. O. Smith Corporation.

Sell Ratings Hold Ratings Buy Ratings Rating Score
Emerson Electric Co. 0 4 3 2.43
A. O. Smith Corporation 0 2 2 2.50

$75.29 is Emerson Electric Co.’s average target price while its potential upside is 11.64%. On the other hand, A. O. Smith Corporation’s potential upside is 4.59% and its average target price is $53.5. The information presented earlier suggests that Emerson Electric Co. looks more robust than A. O. Smith Corporation as far as analyst opinion.

Insider & Institutional Ownership

The shares of both Emerson Electric Co. and A. O. Smith Corporation are owned by institutional investors at 74% and 96.1% respectively. About 0.5% of Emerson Electric Co.’s share are owned by insiders. Comparatively, insiders own roughly 0.6% of A. O. Smith Corporation’s shares.

Performance

Here are the Weekly, Monthly, Quarterly, Half Yearly, Yearly and YTD Performance of both pretenders.

Performance (W) Performance (M) Performance (Q) Performance (HY) Performance (Y) Performance (YTD)
Emerson Electric Co. -1% 3.96% -0.01% -11.38% -2.18% 13.91%
A. O. Smith Corporation -1.57% 9.69% 11.18% -11.56% -15.4% 22.95%

For the past year Emerson Electric Co. has weaker performance than A. O. Smith Corporation

Summary

Emerson Electric Co. beats A. O. Smith Corporation on 11 of the 17 factors.

Emerson Electric Co. designs and manufactures products, and delivers services to industrial, commercial, and consumer markets worldwide. The companyÂ’s Process Management segment offers systems and software; measurement and analytical instrumentation; valves, actuators, and regulators; industry services and solutions; and digital plant architecture solutions. It also provides consulting services for precision measurement, control, monitoring, asset optimization, and safety and reliability of oil and gas reservoirs and plants. This segment serves oil and gas, refining, chemicals, power generation, pharmaceuticals, food and beverages, pulp and paper, metal and mining, and municipal water supplies markets. Its Industrial Automation segment provides fluid power and control products; electrical distribution equipment; and materials joining and precision cleaning products, as well as hermetic motors. The companyÂ’s Climate Technologies segment supplies compressors, temperature sensors and controls, thermostats, flow controls, and remote monitoring technology and services to residential heating and cooling, commercial air conditioning, commercial and industrial refrigeration, and marine control areas. Its Commercial & Residential Solutions segment provides tools for professionals and homeowners; home storage systems; and appliance solutions. The company was formerly known as The Emerson Electric Manufacturing Company and changed its name to Emerson Electric Co. in 2000. Emerson Electric Co. was founded in 1890 and is headquartered in St. Louis, Missouri.

A. O. Smith Corporation manufactures and markets residential and commercial gas, gas tankless, electric water heaters, and water treatment products in North America, China, Europe, and India. The company offers water heaters for residences, restaurants, hotels and motels, office buildings, laundries, car washes, and small businesses; commercial boilers for use in space heating applications for hospitals, schools, hotels, and other large commercial buildings; and expansion tanks, commercial solar water heating systems, swimming pool and spa heaters, and related products and parts. It also provides heat pump and solar units, as well as combi boilers; and air purification products. The company distributes its products through independent wholesale plumbing distributors, as well as through retail channels consisting of hardware and home center chains, and manufacturer representative firms. A. O. Smith Corporation is headquartered in Milwaukee, Wisconsin.


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Source: https://dminute.com/2019/03/12/reviewing-emerson-electric-co-emrs-and-a-o-smith-corporation-nyseaoss-results/

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