5 Conclusions From Emerson Electric's Conference Call

Any presentation from Emerson Electric CEO David Farr usually contains some straight talk -- you would want nothing else from a business leader -- and the company's Investor Conference presentation provided just that. Farr offered detailed color commentary on the company's future, and the key conclusions from his talk gave succor to the bullish thesis for the stock. Here's how and why.

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Emerson Electric Earnings Analysis

Emerson Electric (NYSE:EMR) was already having a difficult 2015, but unfortunately it just got a bit worse with its third-quarter results. The company continued its three-quarter-long streak of lowering its underlying revenue guidance, and management continued to caution investors that market conditions are likely to remain difficult for the next year. Let's take a closer look at the underlying trends in the results, and the pressures building up on the company.


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Emerson Electric's (EMR) David Farr Sounds Gloomy

Investors in Emerson Electric (NYSE: EMR  ) watched on with disappointment as their company missed analyst estimates in the second quarter and lowered full-year estimates. In addition, when speaking on the earnings call, CEO David Farr's gloomily realistic commentary served notice that conditions aren't going to get any better in the near term. With that said, let's take a look at what actually happened in the second quarter and assess whether the headwinds are likely to be long-term or not.


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Dividend Investing Stocks: Emerson Electric

Emerson Electric is a Dividend Aristocrat, one of a select band of companies that have increased their payouts annually for at least 25 years. Income-seeking investors love such stocks, but they also love shares that appreciate over time. With that said, what are the prospects for Emerson Electric to remain a Dividend Aristocrat, and is it time for dividend-seeking investors to buy this company?

A mature dividend playEmerson Electric is a mature company, providing manufacturing and technology for a number of markets, with a relatively high dividend of roughly 2.8%.
Naturally, the stock will attract income seekers, given a yield almost 0.5% above that of the U.S. 10-year Treasury note. However, its relatively high payout ratio -- about 37% of last year's earnings were paid out to shareholders in dividends -- means that its ability to grow its dividend aggressively in future years is somewhat constrained.


To explain this idea quantitatively...


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