Rockwell Automation (NYSE: ROK) and Emerson Electric (NYSE:EMR) are both large-cap industrials companies, but which is the better business? We will compare the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.
Earnings & Valuation
This table compares Rockwell Automation and Emerson Electric’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Rockwell Automation||$6.31 billion||4.17||$825.70 million||$6.35||32.29|
|Emerson Electric||$15.26 billion||3.05||$1.52 billion||$2.35||30.99|
Emerson Electric has higher revenue and earnings than Rockwell Automation. Emerson Electric is trading at a lower price-to-earnings ratio than Rockwell Automation, indicating that it is currently the more affordable of the two stocks.
This table compares Rockwell Automation and Emerson Electric’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of recent ratings and recommmendations for Rockwell Automation and Emerson Electric, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Rockwell Automation currently has a consensus target price of $170.25, suggesting a potential downside of 16.96%. Emerson Electric has a consensus target price of $66.92, suggesting a potential downside of 8.12%. Given Emerson Electric’s stronger consensus rating and higher probable upside, analysts plainly believe Emerson Electric is more favorable than Rockwell Automation.
Volatility and Risk
Rockwell Automation has a beta of 1.23, indicating that its stock price is 23% more volatile than the S&P 500. Comparatively, Emerson Electric has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500.
Insider & Institutional Ownership
72.8% of Rockwell Automation shares are held by institutional investors. Comparatively, 69.2% of Emerson Electric shares are held by institutional investors. 1.3% of Rockwell Automation shares are held by insiders. Comparatively, 0.8% of Emerson Electric shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Rockwell Automation pays an annual dividend of $3.34 per share and has a dividend yield of 1.6%. Emerson Electric pays an annual dividend of $1.94 per share and has a dividend yield of 2.7%. Rockwell Automation pays out 52.6% of its earnings in the form of a dividend. Emerson Electric pays out 82.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Rockwell Automation has raised its dividend for 8 consecutive years and Emerson Electric has raised its dividend for 61 consecutive years. Emerson Electric is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Rockwell Automation beats Emerson Electric on 9 of the 17 factors compared between the two stocks.
About Rockwell Automation
Rockwell Automation, Inc. (Rockwell Automation) is a provider of industrial automation power, control and information solutions for manufacturers. The Company operates through two segments: Architecture & Software and Control Products & Solutions. The Architecture & Software segment contains various hardware, software and communication components of the Company’s integrated control and information architecture capable of controlling the customer’s industrial processes and connecting with their manufacturing enterprise. Architecture & Software has a portfolio of products, including Control platforms that perform multiple control disciplines and monitoring of applications, including discrete, batch and continuous process, drives control, motion control and machine safety control. The Control Products & Solutions segment portfolio includes low and medium voltage electro-mechanical and electronic motor starters, signaling devices, termination and protection devices, relays and timers.
About Emerson Electric
Emerson Electric Co. is a diversified global manufacturing company, which provides solutions to customers by bringing technology and engineering together in the industrial, commercial and consumer markets around the world. The Company operates through four segments based on the nature of the products and services rendered: Process Management, Industrial Automation, Climate Technologies and Commercial & Residential Solutions. The Company’s principal production operations are electronics assembly, metal stamping, forming, casting, machining, welding, plating, heat treating, painting and assembly. In addition, the Company uses specialized production operations, including automatic and semiautomatic testing, automated material handling and storage, ferrous and nonferrous machining, and special furnaces for heat treating and foundry applications. The Company provides measurement, control and diagnostic technologies for automated industrial processes.
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