Return on Equity (ROE)
since 2005
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Emerson Electric Co. pages available for free this week:
- Statement of Comprehensive Income
- Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Analysis of Geographic Areas
- Enterprise Value (EV)
- Dividend Discount Model (DDM)
- Return on Assets (ROA) since 2005
- Price to Book Value (P/BV) since 2005
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Calculation
Emerson Electric Co., ROE, long-term trends, calculation
| ROE | = | 100 | × | Net earnings common stockholders1 | ÷ | Common stockholders’ equity1 | |
|---|---|---|---|---|---|---|---|
| Sep 30, 2019 | = | 100 | × | ÷ | |||
| Sep 30, 2018 | = | 100 | × | ÷ | |||
| Sep 30, 2017 | = | 100 | × | ÷ | |||
| Sep 30, 2016 | = | 100 | × | ÷ | |||
| Sep 30, 2015 | = | 100 | × | ÷ | |||
| Sep 30, 2014 | = | 100 | × | ÷ | |||
| Sep 30, 2013 | = | 100 | × | ÷ | |||
| Sep 30, 2012 | = | 100 | × | ÷ | |||
| Sep 30, 2011 | = | 100 | × | ÷ | |||
| Sep 30, 2010 | = | 100 | × | ÷ | |||
| Sep 30, 2009 | = | 100 | × | ÷ | |||
| Sep 30, 2008 | = | 100 | × | ÷ | |||
| Sep 30, 2007 | = | 100 | × | ÷ | |||
| Sep 30, 2006 | = | 100 | × | ÷ | |||
| Sep 30, 2005 | = | 100 | × | ÷ |
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 | ||||||||
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| Sep 30, 2005 |
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 | ||
| Sep 30, 2018 | ||
| Sep 30, 2017 | ||
| Sep 30, 2016 | ||
| Sep 30, 2015 | ||
| Sep 30, 2014 | ||
| Sep 30, 2013 | ||
| Sep 30, 2012 | ||
| Sep 30, 2011 | ||
| Sep 30, 2010 | ||
| Sep 30, 2009 | ||
| Sep 30, 2008 | ||
| Sep 30, 2007 | ||
| Sep 30, 2006 | ||
| Sep 30, 2005 |
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 | ||
| Sep 30, 2018 | ||
| Sep 30, 2017 | ||
| Sep 30, 2016 | ||
| Sep 30, 2015 | ||
| Sep 30, 2014 | ||
| Sep 30, 2013 | ||
| Sep 30, 2012 | ||
| Sep 30, 2011 | ||
| Sep 30, 2010 | ||
| Sep 30, 2009 | ||
| Sep 30, 2008 | ||
| Sep 30, 2007 | ||
| Sep 30, 2006 | ||
| Sep 30, 2005 |
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).