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CAT vs EMR

CAT
Caterpillar Inc.
NEUTRAL
Price
$735.35
Market Cap
$344.13B
Sector
Industrials
AI Confidence
90%
EMR
Emerson Electric Co.
NEUTRAL
Price
$127.58
Market Cap
$72.17B
Sector
Industrials
AI Confidence
72%

Valuation

P/E Ratio
CAT
39.01
EMR
31.66
Forward P/E
CAT
26.48
EMR
20.19
P/B Ratio
CAT
16.05
EMR
3.54
P/S Ratio
CAT
5.09
EMR
4.01
EV/EBITDA
CAT
26.1
EMR
16.65

Profitability

Gross Margin
CAT
28.79%
EMR
52.84%
Operating Margin
CAT
16.02%
EMR
20.72%
Profit Margin
CAT
13.14%
EMR
12.73%
ROE
CAT
43.53%
EMR
9.36%
ROA
CAT
7.89%
EMR
5.24%

Growth

Revenue Growth
CAT
18.0%
EMR
5.1%
Earnings Growth
CAT
-11.4%
EMR
-35.3%

Financial Health

Debt/Equity
CAT
2.07
EMR
0.68
Current Ratio
CAT
1.44
EMR
0.88
Quick Ratio
CAT
0.87
EMR
0.6

Dividends

Dividend Yield
CAT
0.85%
EMR
1.74%
Payout Ratio
CAT
31.05%
EMR
52.36%

AI Verdict

CAT NEUTRAL

CAT shows neutral fundamentals based on deterministic rules. Financial strength is stable (F-Score 4/9). Mixed signals with both opportunities and risks present.

Strengths
Strong revenue growth of 18.0%
Strong ROE of 43.5%
Risks
High valuation with P/E of 39.0
Premium vs Graham Number ($139.4)
High debt burden with D/E of 2.07
EMR NEUTRAL

Emerson Electric (EMR) trades at a premium valuation with a current P/E of 31.66, above both its forward P/E of 20.19 and the sector average of 27.54, suggesting some near-term multiple compression risk. Despite solid long-term profitability—evidenced by a 20.72% operating margin and consistent earnings beat streak (22 of last 25 quarters)—recent YoY earnings contraction of -35.3% raises near-term concerns. The stock has underperformed peers over the past year (+1.0% vs. sector momentum), though it shows resilience in dividend policy and maintains a manageable 0.68 debt/equity ratio. Analysts remain constructive with a $151.00 target price implying ~18% upside, but weak insider activity and liquidity metrics temper bullish conviction.

Strengths
Operating margin of 20.72% exceeds sector average and peer group, reflecting strong pricing power and cost discipline
Consistent earnings outperformance: 22 out of 25 quarters beat estimates, with an average surprise of +8.5% over the last four
Debt/Equity of 0.68 is well below sector average of 1.80, indicating conservative capital structure
Risks
Earnings growth down -35.3% YoY, signaling potential cyclical headwinds or execution issues despite revenue growth of 5.1%
Current ratio of 0.88 and quick ratio of 0.60 indicate tight liquidity, below 1.0 threshold and weaker than most peers
P/E of 31.66 is elevated relative to forward P/E of 20.19 and sector average of 27.54, leaving little margin for error

Compare Another Pair

CAT vs EMR: Head-to-Head Comparison

This page compares Caterpillar Inc. (CAT) and Emerson Electric Co. (EMR) across key fundamental metrics including valuation ratios, profitability margins, growth rates, financial health indicators, and dividend metrics. Each metric highlights the better-performing stock so you can quickly identify relative strengths and weaknesses.

Our AI engine independently analyzes each company's financials, competitive position, and market conditions to produce a verdict (Bullish, Neutral, or Bearish) along with key strengths and risks. Use this comparison alongside your own research to make informed investment decisions.

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