Return on Equity (ROE)
since 2005
Calculation
Emerson Electric Co., ROE, long-term trends, calculation
| ROE | = | 100 | × | Net earnings common stockholders1 | ÷ | Common stockholders’ equity1 | |
|---|---|---|---|---|---|---|---|
| Sep 30, 2019 | 28.01% | = | 100 | × | 2,306) | ÷ | 8,233) |
| Sep 30, 2018 | 24.62% | = | 100 | × | 2,203) | ÷ | 8,947) |
| Sep 30, 2017 | 17.41% | = | 100 | × | 1,518) | ÷ | 8,718) |
| Sep 30, 2016 | 21.60% | = | 100 | × | 1,635) | ÷ | 7,568) |
| Sep 30, 2015 | 33.54% | = | 100 | × | 2,710) | ÷ | 8,081) |
| Sep 30, 2014 | 21.22% | = | 100 | × | 2,147) | ÷ | 10,119) |
| Sep 30, 2013 | 18.93% | = | 100 | × | 2,004) | ÷ | 10,585) |
| Sep 30, 2012 | 19.12% | = | 100 | × | 1,968) | ÷ | 10,295) |
| Sep 30, 2011 | 23.85% | = | 100 | × | 2,480) | ÷ | 10,399) |
| Sep 30, 2010 | 22.10% | = | 100 | × | 2,164) | ÷ | 9,792) |
| Sep 30, 2009 | 20.15% | = | 100 | × | 1,724) | ÷ | 8,555) |
| Sep 30, 2008 | 26.47% | = | 100 | × | 2,412) | ÷ | 9,113) |
| Sep 30, 2007 | 24.35% | = | 100 | × | 2,136) | ÷ | 8,772) |
| Sep 30, 2006 | 22.63% | = | 100 | × | 1,845) | ÷ | 8,154) |
| Sep 30, 2005 | 19.22% | = | 100 | × | 1,422) | ÷ | 7,400) |
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30), 10-K (reporting date: 2013-09-30), 10-K (reporting date: 2012-09-30), 10-K (reporting date: 2011-09-30), 10-K (reporting date: 2010-09-30), 10-K (reporting date: 2009-09-30), 10-K (reporting date: 2008-09-30), 10-K (reporting date: 2007-09-30), 10-K (reporting date: 2006-09-30), 10-K (reporting date: 2005-09-30).
1 US$ in millions
Over the examined period, net earnings available to common stockholders have demonstrated notable fluctuations. Starting at $1,422 million in 2005, earnings posted a general upward trend, peaking at $2,710 million in 2015. However, this peak was followed by a significant decline in 2016 to $1,635 million and a further dip in 2017 to $1,518 million. Subsequently, earnings recovered in the following years, reaching $2,306 million by 2019.
Common stockholders’ equity exhibited variation as well, increasing from $7,400 million in 2005 to a higher level around 2011 and 2012, where it remained relatively stable near $10,000 million. Following this period, equity declined appreciably, particularly between 2013 and 2016, reaching a low of $7,568 million in 2016 before showing moderate recovery up to $8,233 million by 2019.
Return on equity (ROE) consistently reflected these underlying earnings and equity trends. It started at 19.22% in 2005, rising steadily to a peak of 33.54% in 2015, which corresponds with the highest net earnings and a reduced equity base. After 2015, ROE declined significantly to 21.6% in 2016 and further to 17.41% in 2017, before increasing again to 28.01% by the end of the analysis period in 2019.
The data suggests a period of strong profitability improvement culminating in 2015, with subsequent declines that impacted both earnings and equity, followed by a phase of recovery. The inverse movement between equity levels and ROE around the mid-2010s indicates management’s ability to enhance returns through efficient use of equity, particularly when equity was reduced. Fluctuations in earnings and equity reflect a dynamic operational environment with possibly changing economic or business conditions influencing financial performance.
Comparison to Competitors
Emerson Electric Co., ROE, long-term trends, comparison to competitors
| Emerson Electric Co. | Boeing Co. | Caterpillar Inc. | Eaton Corp. plc | GE Aerospace | Honeywell International Inc. | Lockheed Martin Corp. | RTX Corp. | |
|---|---|---|---|---|---|---|---|---|
| Sep 30, 2019 | 28.01% | — | 41.77% | 13.75% | -17.58% | 33.22% | 199.23% | 13.25% |
| Sep 30, 2018 | 24.62% | 3,085.55% | 43.79% | 13.32% | -72.16% | 37.21% | 361.98% | 13.70% |
| Sep 30, 2017 | 17.41% | 2,309.01% | 5.50% | 17.30% | -9.00% | 9.58% | — | 15.37% |
| Sep 30, 2016 | 21.60% | 599.14% | -0.51% | 12.90% | 11.65% | 24.83% | 350.89% | 18.33% |
| Sep 30, 2015 | 33.54% | 81.70% | 14.19% | 13.03% | -6.23% | 26.08% | 116.40% | 27.81% |
| Sep 30, 2014 | 21.22% | 62.85% | 22.06% | 11.36% | 11.89% | 24.01% | 106.29% | 19.93% |
| Sep 30, 2013 | 18.93% | 30.82% | 18.21% | 11.08% | 10.00% | 22.47% | 60.61% | 17.95% |
| Sep 30, 2012 | 19.12% | 66.47% | 32.40% | 8.07% | 11.09% | 22.55% | 7,038.46% | 19.80% |
| Sep 30, 2011 | 23.85% | 114.31% | 38.25% | 18.07% | 12.15% | 19.13% | 265.23% | 22.76% |
| Sep 30, 2010 | 22.10% | 119.56% | 24.94% | 12.62% | 9.79% | 18.96% | 78.91% | 20.45% |
| Sep 30, 2009 | 20.15% | 61.65% | 10.24% | 5.65% | 9.40% | 24.34% | 73.24% | 19.08% |
| Sep 30, 2008 | 26.47% | — | 58.44% | 16.75% | 16.63% | 38.85% | 112.29% | 29.46% |
| Sep 30, 2007 | 24.35% | 45.25% | 39.86% | 19.22% | 19.22% | 26.50% | 30.93% | 19.78% |
| Sep 30, 2006 | 22.63% | 46.74% | 51.57% | 23.14% | 18.55% | 21.43% | 36.74% | 21.58% |
| Sep 30, 2005 | 19.22% | 23.26% | 33.85% | 21.31% | 14.95% | 14.71% | 23.20% | 18.06% |
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30), 10-K (reporting date: 2013-09-30), 10-K (reporting date: 2012-09-30), 10-K (reporting date: 2011-09-30), 10-K (reporting date: 2010-09-30), 10-K (reporting date: 2009-09-30), 10-K (reporting date: 2008-09-30), 10-K (reporting date: 2007-09-30), 10-K (reporting date: 2006-09-30), 10-K (reporting date: 2005-09-30).
Comparison to Sector (Capital Goods)
Emerson Electric Co., ROE, long-term trends, comparison to sector (capital goods)
| Emerson Electric Co. | Capital Goods | |
|---|---|---|
| Sep 30, 2019 | 28.01% | 18.11% |
| Sep 30, 2018 | 24.62% | 11.28% |
| Sep 30, 2017 | 17.41% | 10.13% |
| Sep 30, 2016 | 21.60% | 20.08% |
| Sep 30, 2015 | 33.54% | 10.42% |
| Sep 30, 2014 | 21.22% | 18.16% |
| Sep 30, 2013 | 18.93% | 15.14% |
| Sep 30, 2012 | 19.12% | 17.58% |
| Sep 30, 2011 | 23.85% | 19.63% |
| Sep 30, 2010 | 22.10% | 15.88% |
| Sep 30, 2009 | 20.15% | 13.47% |
| Sep 30, 2008 | 26.47% | 24.97% |
| Sep 30, 2007 | 24.35% | 22.64% |
| Sep 30, 2006 | 22.63% | 22.16% |
| Sep 30, 2005 | 19.22% | 17.27% |
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30), 10-K (reporting date: 2013-09-30), 10-K (reporting date: 2012-09-30), 10-K (reporting date: 2011-09-30), 10-K (reporting date: 2010-09-30), 10-K (reporting date: 2009-09-30), 10-K (reporting date: 2008-09-30), 10-K (reporting date: 2007-09-30), 10-K (reporting date: 2006-09-30), 10-K (reporting date: 2005-09-30).
Comparison to Industry (Industrials)
Emerson Electric Co., ROE, long-term trends, comparison to industry (industrials)
| Emerson Electric Co. | Industrials | |
|---|---|---|
| Sep 30, 2019 | 28.01% | 14.56% |
| Sep 30, 2018 | 24.62% | 17.95% |
| Sep 30, 2017 | 17.41% | 18.24% |
| Sep 30, 2016 | 21.60% | 21.69% |
| Sep 30, 2015 | 33.54% | 16.11% |
| Sep 30, 2014 | 21.22% | 19.68% |
| Sep 30, 2013 | 18.93% | 16.40% |
| Sep 30, 2012 | 19.12% | 17.20% |
| Sep 30, 2011 | 23.85% | 20.10% |
| Sep 30, 2010 | 22.10% | 16.41% |
| Sep 30, 2009 | 20.15% | 12.84% |
| Sep 30, 2008 | 26.47% | 20.74% |
| Sep 30, 2007 | 24.35% | 20.36% |
| Sep 30, 2006 | 22.63% | 32.16% |
| Sep 30, 2005 | 19.22% | 7.80% |
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30), 10-K (reporting date: 2013-09-30), 10-K (reporting date: 2012-09-30), 10-K (reporting date: 2011-09-30), 10-K (reporting date: 2010-09-30), 10-K (reporting date: 2009-09-30), 10-K (reporting date: 2008-09-30), 10-K (reporting date: 2007-09-30), 10-K (reporting date: 2006-09-30), 10-K (reporting date: 2005-09-30).