Dividend Aristocrats In Focus: Emerson Electric

Up to date on February twenty seventh, 2026 by Bob Ciura

The Dividend Aristocrats include corporations which have raised their dividends for no less than 25 years in a row. Over the a long time, many of those corporations have turn out to be enormous multinational firms, however not all.

You’ll be able to see the complete listing of all 69 Dividend Aristocrats right here.

We created a full listing of all Dividend Aristocrats and vital monetary metrics like price-to-earnings ratios and dividend yields. You’ll be able to obtain your copy of the Dividend Aristocrats listing by clicking on the hyperlink beneath:

Disclaimer: Certain Dividend shouldn’t be affiliated with S&P International in any method. S&P International owns and maintains The Dividend Aristocrats Index. The data on this article and downloadable spreadsheet relies on Certain Dividend’s personal overview, abstract, and evaluation of the S&P 500 Dividend Aristocrats ETF (NOBL) and different sources, and is supposed to assist particular person traders higher perceive this ETF and the index upon which it’s based mostly. Not one of the info on this article or spreadsheet is official information from S&P International. Seek the advice of S&P International for official info.

Emerson Electrical (EMR) has raised its dividend for 69 consecutive years, giving it one of many longest dividend development streaks within the inventory market.

This additionally qualifies the corporate as a Dividend King. Solely 4 corporations have longer dividend development streaks than Emerson.

The corporate has achieved an distinctive dividend development document due to its sturdy enterprise mannequin, respectable resilience to downturns, and considerably conservative payout ratio.

These components present a margin of security throughout recessions. On this article, we’ll overview Emerson’s prospects as an funding as we speak.

Enterprise Overview

Emerson Electrical was based in Missouri in 1890. Since then, it has developed from a regional producer of electrical motors and followers right into a expertise and engineering firm, offering options to industrial, business and particular person prospects.

It’s a international chief with a presence in additional than 150 international locations. It presents industrial gear and software program to the oil and fuel business, refining, energy era, and different industries.

Emerson posted first quarter earnings on February 4th, 2026, and outcomes have been barely higher than anticipated. Adjusted earnings-per-share got here to $1.46, which was a nickel forward of estimates.

Income was up 4.1% year-over-year to $4.35 billion, which met expectations. Internet revenue was $605 million, which was increased from $585 million within the year-ago interval.

Underlying orders for the quarter have been up 9% year-on-year, marking the fourth straight quarter of development. Underlying gross sales, which is akin to natural income, rose 2%.

Working money stream was down 10% year-over-year to $699 million, whereas free money stream was off 13% to $602 million. The latter mirrored working capital timing and better curiosity expense.

The backlog ended the quarter at $7.9 billion, which was up 9% year-over-year, and the book-to-bill ratio was 1.13.

Administration famous they count on to return $2.2 billion to shareholders this yr, together with $1 billion in share repurchases and the steadiness in dividends.

Progress Prospects

Emerson has pursued development by increasing its buyer base and buying many corporations. The corporate recurrently acquires and divests components of its enterprise to create an optimum portfolio combine.

Total, Emerson has performed many acquisitions and divestments to reshape its enterprise.

Emerson is present process a major shift in its technique. It’s promoting off legacy models and focusing extra on automation and recurring income.

We’re estimating development of 9% as administration stays bullish, there are indicators of natural income development enchancment, and margins are bettering.

Mid-single digit development in income and a tailwind from the buyback would be the key drivers of earnings-per-share development within the coming years, and we see Emerson as rebounding.

Steering for this yr is sort of bullish at this level, implying document earnings by a large margin. As well as, AspenTech is offering increased margins along with value financial savings.

Aggressive Benefits & Recession Efficiency

Emerson has served its prospects for a number of a long time, constructing nice experience within the markets it serves.

As well as, due to its massive scale and dominant international presence, it has an awesome popularity. This gives the corporate with a major aggressive benefit.

Alternatively, as a result of its reliance on industrial and business prospects, Emerson is weak to recessions and downturns within the power sector. Within the Nice Recession, its earnings per share have been as follows:

• 2007 earnings-per-share of $2.66
• 2008 earnings-per-share of $3.11 (17% enhance)
• 2009 earnings-per-share of $2.27 (27% decline)
• 2010 earnings-per-share of $2.60 (15% enhance)
• 2011 earnings-per-share of $3.24 (25% enhance)

Emerson survived the Nice Recession with only one yr of decline in earnings per share, which is definitely spectacular.

Given its sensitivity to financial cycles, it’s spectacular that Emerson has grown its dividend for 69 consecutive years. The distinctive dividend document will be attributed to the corporate’s respectable resilience throughout downturns.

One more reason is the conservative payout ratio, which must be about 34% this yr. This gives a cloth margin of security for the dividend throughout financial downturns.

Valuation & Anticipated Returns

Primarily based on anticipated adjusted EPS of $6.52 for fiscal 2026, Emerson is buying and selling at 23.3 instances its anticipated EPS. This earnings a number of is decrease than our estimate of truthful worth, which is 20 instances earnings.

This means a -3.1% annual headwind ought to it return to twenty instances earnings over the subsequent 5 years.

Subsequently, we challenge complete annual returns of 6.9% over the subsequent 5 years, as a result of 9% earnings development, the beginning yield of 1.5%, and the contracting P/E a number of.

Remaining Ideas

Emerson has a powerful dividend development document, significantly given its heavy reliance on industrial and business prospects, who wrestle throughout recessions or downturn within the power sector.

We see the inventory as considerably overvalued as we speak. Whereas the dividend development streak is notable, the whole return potential is respectable at this level.

Consequently, Emerson earns a purchase score as a result of projected returns.

Moreover, the next Certain Dividend databases comprise essentially the most dependable dividend growers in our funding universe:

• The Dividend Champions: Dividend shares with 25+ years of dividend will increase, together with these that won’t qualify as Dividend Aristocrats.
• The Finest DRIP Shares: The highest 15 Dividend Aristocrats with no-fee dividend reinvestment plans.

When you’re in search of shares with distinctive dividend traits, think about the next Certain Dividend databases:

The most important home inventory market indices are one other strong useful resource for locating funding concepts. Certain Dividend compiles the next inventory market databases and updates them month-to-month: