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
The return on equity (ROE) exhibited significant volatility between 2005 and 2019, fluctuating between a low of 17.41% and a peak of 33.54%. The overall trajectory indicates a capacity to maintain double-digit returns, though these figures were driven by varying combinations of net earnings growth and changes in the common stockholders' equity base.
- Initial Growth and First Contraction (2005–2009)
- A period of steady improvement in ROE occurred from 2005 to 2008, rising from 19.22% to 26.47%. This growth was supported by a consistent increase in net earnings, which climbed from 1,422 million to 2,412 million. However, a sharp decline is observed in 2009, where ROE dropped to 20.15%, primarily driven by a reduction in net earnings to 1,724 million.
- Stability and Equity Expansion (2010–2013)
- Between 2010 and 2011, ROE recovered to 23.85% as earnings returned to growth. From 2012 to 2013, however, a downward trend emerged, with ROE falling to 18.93%. During this specific window, the common stockholders' equity reached its historical peak of 10,585 million in 2013, which acted as a denominator drag on the ROE despite earnings remaining relatively stable around 2,000 million.
- Equity Reduction and Performance Peak (2014–2015)
- A significant spike in ROE is evident in 2015, reaching a maximum of 33.54%. This peak was the result of a dual effect: net earnings increased to their highest level in the period at 2,710 million, while common stockholders' equity decreased sharply to 8,081 million in 2014 and further to 7,568 million in 2015. The reduction in the equity base substantially amplified the return percentage.
- Late Period Fluctuations (2016–2019)
- Following the 2015 peak, ROE declined to 17.41% by 2017, coinciding with a drop in net earnings to 1,518 million. A strong recovery followed in 2018 and 2019, with ROE ascending to 24.62% and 28.01%, respectively. This final upward trend was driven by a recovery in net earnings to 2,306 million by 2019, coupled with a decreasing trend in total stockholders' equity, which fell to 8,233 million.
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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).