Buffett Brain · Research note
Score updated 23 Oct 2026 · analysis from 22 Sept 2026
EMR· Industrials
Emerson Electric
Emerson Electric's top-quintile operating margin suggests a moat, but a P/E of 32.9 challenges valuation comfort.
Buffett fit
Partial fit
Owner
60
Durability
69
Management
80
Price
15
Score updated 23 Oct 2026 · analysis from 22 Sept 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Industrials stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
Owning Emerson Electric entirely, we'd focus on sustaining its 52.7% and leveraging its top-quintile of 20%.
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Emerson's 5-year average of 17.5% and consistent profitability over the past five years indicate durability.
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Emerson's management has reduced share count by 1.51% annually over five years, indicating disciplined .
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With an earnings yield of 3.04% and yield of 3.32%, Emerson appears overvalued at a of 32.9.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
7- 1 of 52.7% is in the sector's top quintile.
- 2 of 20% exceeds the sector's top-quintile cutoff of 17.8%.
- 35-year average of 17.5% is top-quintile in the sector.
- 4Consistent profitability over the past five years.
Concerns
7- 1 of 32.9 implies high growth expectations not supported by 5-year EPS CAGR of 1.4%.
- 2Net debt/EBITDA of 2.25 exceeds Buffett's comfort zone of <2x.
- 3Current ratio of 0.87 indicates potential liquidity concerns.
- 4Negative YoY growth of -8.44% raises sustainability questions.
Price history
$160+65.2%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Emerson Electric Co. operates in the industrial machinery sector, focusing on Automation Solutions and Commercial & Residential Solutions. The Automation segment serves diverse sectors like oil and gas, and life sciences, offering process control software and industrial equipment. The Commercial segment provides HVAC systems and environmental controls. With a of 52.7%, Emerson shows strong unit economics.
How this analysis has moved
The call has held across 5 reviews.
Sep 27, 2026 → Oct 23, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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