Head to Head Review: Vestas Wind Systems AS (OTCMKTS:VWDRY) and Emerson Electric (NYSE:EMR)

Emerson Electric (NYSE:EMR) and Vestas Wind Systems AS (OTCMKTS:VWDRY) are both large-cap industrials companies, but which is the better business? We will compare the two companies based on the strength of their profitability, earnings, valuation, institutional ownership, dividends, analyst recommendations and risk.

Insider and Institutional Ownership

74.3% of Emerson Electric shares are owned by institutional investors. 0.2% of Emerson Electric shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

Emerson Electric has a beta of 1.26, indicating that its stock price is 26% more volatile than the S&P 500. Comparatively, Vestas Wind Systems AS has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Emerson Electric and Vestas Wind Systems AS, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Emerson Electric	1	6	9	2	2.67
Vestas Wind Systems AS	1	3	1	2	2.57

Emerson Electric presently has a consensus target price of $149.06, indicating a potential upside of 12.26%. Given Emerson Electric’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Emerson Electric is more favorable than Vestas Wind Systems AS.

Profitability

This table compares Emerson Electric and Vestas Wind Systems AS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Emerson Electric	12.73%	15.87%	8.05%
Vestas Wind Systems AS	5.00%	27.61%	3.68%

Dividends

Emerson Electric pays an annual dividend of $2.22 per share and has a dividend yield of 1.7%. Vestas Wind Systems AS pays an annual dividend of $0.02 per share and has a dividend yield of 0.2%. Emerson Electric pays out 55.0% of its earnings in the form of a dividend. Vestas Wind Systems AS pays out 5.9% 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. Emerson Electric is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Emerson Electric and Vestas Wind Systems AS”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Emerson Electric	$18.02 billion	4.14	$2.29 billion	$4.04	32.87
Vestas Wind Systems AS	$18.72 billion	1.45	$539.97 million	$0.34	26.38

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

Summary

Emerson Electric beats Vestas Wind Systems AS on 14 of the 17 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 Vestas Wind Systems AS

Vestas Wind Systems A/S engages in the design, manufacture, installation, and services of wind turbines the United States, Denmark, and internationally. It operates in two segments, Power Solutions and Service. The Power Solutions segment offers onshore and offshore wind power plants, wind turbines, development sites, etc. The Service segment engages in the sale of service contracts, spare parts, and related activities. Vestas Wind Systems A/S was founded in 1898 and is headquartered in Aarhus, Denmark.