Analyzing General Cable Corporation (BGC) and Emerson Electric (NYSE:EMR)
General Cable Corporation (NYSE: BGC) and Emerson Electric (NYSE:EMR) are both industrial products companies, but which is the better investment? We will contrast the two companies based on the strength of their profitabiliy, dividends, institutional ownership, earnings, risk, analyst recommendations and valuation.
General Cable Corporation pays an annual dividend of $0.72 per share and has a dividend yield of 4.0%. Emerson Electric pays an annual dividend of $1.92 per share and has a dividend yield of 3.2%. General Cable Corporation pays out -20.2% of its earnings in the form of a dividend. Emerson Electric pays out 85.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. General Cable Corporation has increased its dividend for 60 consecutive years. General Cable Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
General Cable Corporation has a beta of 2.82, meaning that its stock price is 182% more volatile than the S&P 500. Comparatively, Emerson Electric has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.
This is a summary of current ratings and target prices for General Cable Corporation and Emerson Electric, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|General Cable Corporation||0||2||0||0||2.00|
Emerson Electric has a consensus target price of $57.43, suggesting a potential downside of 5.72%. Given Emerson Electric’s stronger consensus rating and higher probable upside, analysts clearly believe Emerson Electric is more favorable than General Cable Corporation.
Institutional and Insider Ownership
99.4% of General Cable Corporation shares are held by institutional investors. Comparatively, 69.1% of Emerson Electric shares are held by institutional investors. 1.8% of General Cable Corporation shares are held by company insiders. Comparatively, 0.8% of Emerson Electric shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Earnings & Valuation
This table compares General Cable Corporation and Emerson Electric’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|General Cable Corporation||$3.70 billion||0.24||$205.10 million||($3.57)||-5.04|
|Emerson Electric||$14.76 billion||2.66||$3.15 billion||$2.25||27.07|
Emerson Electric has higher revenue and earnings than General Cable Corporation. General Cable Corporation is trading at a lower price-to-earnings ratio than Emerson Electric, indicating that it is currently the more affordable of the two stocks.
This table compares General Cable Corporation and Emerson Electric’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|General Cable Corporation||-4.80%||13.47%||1.10%|
Emerson Electric beats General Cable Corporation on 10 of the 17 factors compared between the two stocks.
About General Cable Corporation
General Cable Corporation is engaged in the development, design, manufacture, marketing and distribution of copper, aluminum and fiber optic wire and cable products for use in the energy, industrial, construction, specialty and communications markets. The Company’s segments include North America, Europe, Latin America, and Africa/Asia Pacific. The Company produces and sells to a range of end markets, including markets for electric utility, electrical infrastructure, communications, construction and rod mill products. As of December 31, 2016, the North America segment included 17 manufacturing facilities across the region. The Europe segment consists of six manufacturing facilities across the region. The Latin America segment consists of six manufacturing facilities across the region. The Africa/Asia Pacific segment consists of four manufacturing facilities across the segment.
About Emerson Electric
Emerson Electric Co. is a diversified global manufacturing company, which provides solutions to customers by bringing technology and engineering together in the industrial, commercial and consumer markets around the world. The Company operates through four segments based on the nature of the products and services rendered: Process Management, Industrial Automation, Climate Technologies and Commercial & Residential Solutions. The Company’s principal production operations are electronics assembly, metal stamping, forming, casting, machining, welding, plating, heat treating, painting and assembly. In addition, the Company uses specialized production operations, including automatic and semiautomatic testing, automated material handling and storage, ferrous and nonferrous machining, and special furnaces for heat treating and foundry applications. The Company provides measurement, control and diagnostic technologies for automated industrial processes.
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