Reviewing Emerson Electric (NYSE:EMR) & Enersys (NYSE:ENS)

Emerson Electric (NYSE:EMR) and Enersys (NYSE:ENS) are both industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, profitability, risk, analyst recommendations, dividends, valuation and institutional ownership.

Profitability

This table compares Emerson Electric and Enersys’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Emerson Electric	13.60%	13.22%	7.57%
Enersys	10.05%	22.12%	10.59%

Institutional and Insider Ownership

74.3% of Emerson Electric shares are held by institutional investors. Comparatively, 94.9% of Enersys shares are held by institutional investors. 0.5% of Emerson Electric shares are held by insiders. Comparatively, 0.9% of Enersys shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Emerson Electric pays an annual dividend of $2.11 per share and has a dividend yield of 1.5%. Enersys pays an annual dividend of $0.96 per share and has a dividend yield of 1.0%. Emerson Electric pays out 50.5% of its earnings in the form of a dividend. Enersys pays out 10.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Emerson Electric has increased its dividend for 68 consecutive years and Enersys has increased its dividend for 2 consecutive years. Emerson Electric is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Emerson Electric and Enersys”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Emerson Electric	$17.49 billion	4.52	$1.97 billion	$4.18	33.60
Enersys	$3.62 billion	0.99	$363.73 million	$9.01	10.15

Emerson Electric has higher revenue and earnings than Enersys. Enersys is trading at a lower price-to-earnings ratio than Emerson Electric, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Emerson Electric has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500. Comparatively, Enersys has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for Emerson Electric and Enersys, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Emerson Electric	2	4	11	2	2.68
Enersys	0	0	3	0	3.00

Emerson Electric currently has a consensus price target of $142.2778, suggesting a potential upside of 1.32%. Enersys has a consensus price target of $118.3333, suggesting a potential upside of 29.38%. Given Enersys’ stronger consensus rating and higher possible upside, analysts clearly believe Enersys is more favorable than Emerson Electric.

Summary

Emerson Electric beats Enersys on 10 of the 18 factors compared between the two stocks.

About Emerson Electric

Emerson Electric Co., a technology and software company, provides various solutions for customers in industrial, commercial, and consumer markets in the Americas, Asia, the Middle East, Africa, and Europe. It operates in six segments: Final Control, Control Systems & Software, Measurement & Analytical, AspenTech, Discrete Automation, and Safety & Productivity. The Final Control segment provides control, isolation, shutoff, pressure relief, and pressure safety valves, actuators, and regulators for process and hybrid industries. The Measurement & Analytical segment offers intelligent instrumentation measuring the physical properties of liquids or gases, such as pressure, temperature, level, flow, acoustics, corrosion, pH, conductivity, water quality, toxic gases, and flame. The Discrete Automation segment offers solenoid and pneumatic valves, valve position indicators, pneumatic cylinders, air preparation equipment, pressure and temperature switches, electric linear motion solutions, programmable automation control systems, electrical distribution equipment, and materials joining solutions. The Safety & Productivity segment offers tools for professionals and homeowners; pipe-working tools, including pipe wrenches, pipe cutters, pipe threading and roll grooving equipment, battery hydraulic tools; electrical tools; and other professional tools. The Control Systems & Software segment provides distributed control systems, safety instrumented systems, SCADA systems, application software, digital twins, asset performance management, and cybersecurity. The Test & Measurement provides software-connected automated test and measurement systems. The AspenTech segment provides asset optimization software that enables industrial manufacturers to design, operate, and maintain operations for enhancing performance through a combination of decades of modeling, simulation, and optimization capabilities. The company was incorporated in 1890 and is headquartered in Saint Louis, Missouri.

About Enersys

EnerSys engages in the provision of stored energy solutions for industrial applications worldwide. It operates in four segments: Energy Systems, Motive Power, Specialty, and New Ventures. The Energy Systems segment offers uninterruptible power systems (UPS) applications for computer and computer-controlled systems, as well as telecommunications systems; switchgear and electrical control systems used in industrial facilities and electric utilities, large-scale energy storage, and energy pipelines; integrated power solutions and services to broadband, telecom, data center, and renewable and industrial customers; and thermally managed cabinets and enclosures for electronic equipment and batteries. The Motive Power segment provides power solutions for electric industrial forklifts used in manufacturing, warehousing, and other material handling applications, as well as automated guided vehicles, mining equipment, and diesel locomotive starting and other rail equipment. The Specialty offers batteries for starting, lighting, and ignition applications in automotive and over-the-road trucks; and energy solutions for satellites, spacecraft, commercial aircraft, military land vehicles, aircraft, submarines, ships, and other tactical vehicles, as well as medical devices and equipment. The New Venture segment provides energy storage and management systems for demand charge reduction, utility back-up power, and dynamic fast charging for electric vehicles. The company also offers battery chargers, power equipment, battery accessories, and outdoor cabinet enclosures, as well as related after-market and customer-support services for industrial batteries. It sells its products through a network of distributors, independent representatives, and internal sales forces. The company was formerly known as Yuasa, Inc. and changed its name to EnerSys in January 2001. EnerSys was founded in 1991 and is headquartered in Reading, Pennsylvania.