Emerson Electric

Methodology

Emerson's automation and commercial solutions business shows moderate cyclicality tied to industrial capital spending and process industry investments. The company's portfolio restructuring toward higher-margin automation creates transition uncertainty. Fair value works best when normalizing for industrial cycles and accounting for mid-single-digit growth from automation secular trends.

Methodology

Emerson typically trades at PEG ratios between 1.2-2.0x, reflecting solid industrial franchises offset by cyclical exposure and portfolio transition execution risk. The company's process automation leadership and software growth support steady earnings. PEG works reasonably well when considering long-term positioning in industrial automation despite near-term cyclical headwinds.

Methodology

Emerson pays a dividend yielding 2-3% with dividend aristocrat status spanning decades, making PEGY significantly more attractive than PEG. The stable industrial cash flows support reliable dividend growth through cycles. Total return benefits meaningfully from consistent yield generation that complements moderate earnings growth in mature automation markets.