Emerson Electric (EMR) has raised its dividend for 61 consecutive years.This makes the company a Dividend King. The Dividend Kings are a small group of companies that have at least 50 years of dividend growth. 

There are only four companies with more years of dividend growth than Emerson. A company that can raise its dividend every year regardless of economic conditions is one that income orientated investors should consider owning.

This article will examine Emerson’s business model, growth prospects, recession performance and valuation to determine if now is a good time to buy shares of this Dividend King.

Business Overview

Emerson supplies industrial equipment and products to more than 150 countries around the world. Emerson consists of two business segments. Automation Solutions, which accounts for approximately 60% of sales, offers products that help businesses run their operations with less power and expense. Products in this division help measure temperature, allow facilities to run on automation and help detect cracks in pipelines.

The Commercial & Residential Solutions is responsible for the remaining 40% of sales and offers products that help businesses run smoothly. Products include HVAC, refrigeration and security and monitoring systems.

Emerson has a current market cap of almost $46 billion and has sales of more than $15 billion in 2017. Emerson has been in business since 1890 and employees almost 80,000 people.

Growth Prospects

Emerson reported first quarter earnings on February 6th, 2018.

EMR Earnings

Source: Emerson Electric First Quarter Earnings Presentation, slide 3

Excluding a benefit due to tax reform, Emerson earned $0.58 per share. This topped analysts’ estimates by $0.03 and was 3.6% above earnings per share for the first quarter of 2017. The company grew revenue 18.6% to $3.82 billion. This was $100 million above expectations. Aside from the Europe and Middle East/Africa regions, Emerson saw growth in every geography that it does business. China sales were especially strong, growing 23% year over year.

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