Emerson Electric vs General Electric Which Is a Better Investment?

Emerson Electric and General Electric are two prominent companies in the electrical equipment industry, with both companies having a long history of providing innovative solutions to a wide range of industries. Emerson Electric has a strong reputation for its focus on efficiency and sustainability, while General Electric has been a major player in the industry for decades with a diverse portfolio of products and services. Investors interested in this sector may want to consider the performance and potential of both stocks to make informed investment decisions.

Emerson Electric or General Electric?

When comparing Emerson Electric and General Electric, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Emerson Electric and General Electric.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Emerson Electric has a dividend yield of 1.6%, while General Electric has a dividend yield of 0.56%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Emerson Electric reports a 5-year dividend growth of 1.40% year and a payout ratio of 61.03%. On the other hand, General Electric reports a 5-year dividend growth of -2.87% year and a payout ratio of 12.65%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Emerson Electric P/E ratio at 38.00 and General Electric's P/E ratio at 28.84. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Emerson Electric P/B ratio is 3.46 while General Electric's P/B ratio is 9.55.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Emerson Electric has seen a 5-year revenue growth of -0.04%, while General Electric's is -0.44%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Emerson Electric's ROE at 9.37% and General Electric's ROE at 26.39%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $130.25 for Emerson Electric and $164.45 for General Electric. Over the past year, Emerson Electric's prices ranged from $91.65 to $134.85, with a yearly change of 47.14%. General Electric's prices fluctuated between $95.69 and $194.80, with a yearly change of 103.57%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.