Contrasting Murata Manufacturing (OTCMKTS:MRAAY) and Emerson Electric (NYSE:EMR)

Emerson Electric (NYSE:EMR) and Murata Manufacturing (OTCMKTS:MRAAY) are both large-cap industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, earnings, analyst recommendations, dividends and profitability.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Emerson Electric and Murata Manufacturing, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Emerson Electric	1	6	8	2	2.65
Murata Manufacturing	0	0	0	0	0.00

Emerson Electric presently has a consensus target price of $147.67, suggesting a potential upside of 8.10%. Given Emerson Electric’s stronger consensus rating and higher probable upside, analysts plainly believe Emerson Electric is more favorable than Murata Manufacturing.

Dividends

Emerson Electric pays an annual dividend of $2.22 per share and has a dividend yield of 1.6%. Murata Manufacturing pays an annual dividend of $0.11 per share and has a dividend yield of 1.0%. Emerson Electric pays out 55.0% of its earnings in the form of a dividend. Murata Manufacturing pays out 25.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Emerson Electric has raised its dividend for 68 consecutive years. Emerson Electric is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Emerson Electric and Murata Manufacturing”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Emerson Electric	$18.02 billion	4.26	$2.29 billion	$4.04	33.81
Murata Manufacturing	$11.45 billion	3.47	$1.54 billion	$0.43	24.84

Emerson Electric has higher revenue and earnings than Murata Manufacturing. Murata Manufacturing is trading at a lower price-to-earnings ratio than Emerson Electric, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Emerson Electric has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500. Comparatively, Murata Manufacturing has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.

Profitability

This table compares Emerson Electric and Murata Manufacturing’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Emerson Electric	12.73%	15.87%	8.05%
Murata Manufacturing	13.40%	9.16%	7.84%

Insider and Institutional Ownership

74.3% of Emerson Electric shares are held by institutional investors. Comparatively, 0.8% of Murata Manufacturing shares are held by institutional investors. 0.5% of Emerson Electric shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Emerson Electric beats Murata Manufacturing on 16 of the 18 factors compared between the two stocks.

About Emerson Electric

Emerson Electric Co., a technology and software company, provides various solutions for customers in industrial, commercial, and consumer markets in the Americas, Asia, the Middle East, Africa, and Europe. It operates in six segments: Final Control, Control Systems & Software, Measurement & Analytical, AspenTech, Discrete Automation, and Safety & Productivity. The Final Control segment provides control, isolation, shutoff, pressure relief, and pressure safety valves, actuators, and regulators for process and hybrid industries. The Measurement & Analytical segment offers intelligent instrumentation measuring the physical properties of liquids or gases, such as pressure, temperature, level, flow, acoustics, corrosion, pH, conductivity, water quality, toxic gases, and flame. The Discrete Automation segment offers solenoid and pneumatic valves, valve position indicators, pneumatic cylinders, air preparation equipment, pressure and temperature switches, electric linear motion solutions, programmable automation control systems, electrical distribution equipment, and materials joining solutions. The Safety & Productivity segment offers tools for professionals and homeowners; pipe-working tools, including pipe wrenches, pipe cutters, pipe threading and roll grooving equipment, battery hydraulic tools; electrical tools; and other professional tools. The Control Systems & Software segment provides distributed control systems, safety instrumented systems, SCADA systems, application software, digital twins, asset performance management, and cybersecurity. The Test & Measurement provides software-connected automated test and measurement systems. The AspenTech segment provides asset optimization software that enables industrial manufacturers to design, operate, and maintain operations for enhancing performance through a combination of decades of modeling, simulation, and optimization capabilities. The company was incorporated in 1890 and is headquartered in Saint Louis, Missouri.

About Murata Manufacturing

Murata Manufacturing Co., Ltd. designs, manufactures, and sells ceramic-based passive electronic components and solutions in Japan and internationally. The company offers capacitors, inductors, noise suppression products/EMI suppression filters/ESD protection devices, resistors, thermistors, sensors, timing devices, quartz devices, sound components, power products, batteries, micro mechatronics, RFID product, baluns, couplers, filters, phase shifters, RF switches, front-end modules, SAW components, connectors, antennas, connectivity modules, wireless connectivity platforms, ionizers/active oxygen modules, and transformers. It also offers Femtet, a CAE software that solves various engineering challenges; and provides silver oxide battery. In addition, the company provides connectivity, Wifi sensing, IOT, AI, and RFID solutions. Murata Manufacturing Co., Ltd. offers its products for use in communications equipment, mobility, enterprise system, industrial, healthcare, medical, personal electronics applications, and other sectors. The company was founded in 1944 and is headquartered in Nagaokakyo, Japan.