Is Emerson Electric Stock a Buy?
Benjamin Graham, the Wall Street icon who helped train Warren Buffett, liked to say that even a great company can be a bad investment if you pay too much for the stock. Which is why valuation is so important to consider when you are looking to buy.
Right now, industrial giant Emerson Electric (NYSE: EMR) looks attractive when you examine traditional valuation metrics. However, this Dividend King's yield is surprisingly unattractive from a historical perspective. Perhaps some caution is in order.
When it comes to valuation, most investors default to the price-to-earnings (P/E) ratio. Right now, Emerson Electric's P/E is around 18 times compared to a five-year average of nearly 21 times. That makes the company appear fairly cheap.
Source Fool.com
