One of our top dividend stock picks is Emerson Electric (NYSE: EMR). It has increased its dividend every year since its inception in 1890. Emerson’s dividend history is all the more impressive because the industrial sector tends to be more cyclical and vulnerable to downturns when the global economy goes into recession. Nevertheless, Emerson Electric continues to deliver steady profitability and annual dividend increases to its shareholders.
Today, Emerson is divided into residential, commercial, and residential real estate. The company is a residential/commercial building, and there are more than 2,000 residential and commercial buildings in the United States. In 2009, Emerson was walloped by the coronavirus crisis, which exposed them to severe fluctuations in the global economy. Emerson’s net sales declined by 9% in 2009 compared to underlying sales, which fell 7%.
Recently Emerson announced a $100 million investment in Boulder Colorado to manufacturing and innovation center.
“This U.S. investment significantly expands our ability to serve as industry leaders, helping customers in essential industries optimize their operations with the latest technologies,” said David Farr, chairman, and CEO. “Our new facility demonstrates our continued commitment to customer-driven innovation and high-tech manufacturing, as well as our focus on attracting the best and brightest talent to work for Emerson.”
Adjusted earnings per share were $0.89 that went above guidance of $0.79-0.89, which was a 7% increase. Emerson’s involvement in the oil and gas industry has been a fierce headwind, but it is still an essential part of his business.
It is capable of generating cash flow even with stagnant or declining sales, and despite weak results in early 2020, Emerson is confident of surviving the recession.
Emerson generated an operating cash flow of $588 million in the first quarter of 2018, up 10% from the same period last year. Meanwhile, free cash flows ($477 million) rose 15% versus last year.
Emerson Electric (ER) stock is one of our top dividend-paying stocks with a 3.6% dividend yield. Emerson’s competitive advantage is based on its ability to build customer relationships, and it has a global customer base that is experiencing strong economic growth. Underlying sales momentum, such as strong demand for its high-end products, is expected to drive long-term growth as well as the company’s strong balance sheet.
Emerson Electric (EMR) Stock Recommendations
Apr-22-20 Upgrade Argus Hold → Buy $58
Mar-23-20 Downgrade Vertical Research Buy → Hold
Mar-23-20 Downgrade Morgan Stanley Overweight → Equal-Weight $50
Feb-18-20 Downgrade RBC Capital Mkts Outperform → Sector Perform $85 → $74
Dec-12-19 Initiated UBS Neutral $78
Nov-14-19 Downgrade HSBC Securities Hold → Reduce $64
Nov-06-19 Downgrade Cowen Outperform → Market Perform $72
Sep-30-19 Upgrade RBC Capital Mkts Sector Perform → Outperform $65 → $77
Aug-13-19 Downgrade Argus Buy → Hold
Apr-08-19 Upgrade Citigroup Neutral → Buy $67 → $81
Jan-14-19 Upgrade Citigroup Sell → Neutral
Jan-04-19 Downgrade RBC Capital Mkts Outperform → Sector Perform
Jan-03-19 Upgrade Credit Suisse Neutral → Outperform
Dec-17-18 Downgrade Barclays Overweight → Equal Weight $85 → $71
Dec-17-18 Downgrade Barclays Overweight → Equal Weight
Dec-12-18 Downgrade Gordon Haskett Buy → Hold
Nov-20-18 Initiated Stephens Overweight
Oct-12-18 Initiated Credit Suisse Neutral
Aug-21-18 Initiated Morgan Stanley Overweight $85
Apr-24-18 Upgrade Berenberg Sell → Hold
Evidence-based financial writer with 9 years of experience specializing in earnings, economic data coverage, and bond markets. I combine fundamentals, technicals, and macro to identify low-risk, asymmetric opportunities.