Financial Contrast: American Superconductor Corporation (AMSC) and Emerson Electric (EMR)

American Superconductor Corporation (NASDAQ: AMSC) and Emerson Electric (NYSE:EMR) are both computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, earnings, profitability, institutional ownership, dividends and analyst recommendations.

Insider & Institutional Ownership

32.6% of American Superconductor Corporation shares are owned by institutional investors. Comparatively, 70.2% of Emerson Electric shares are owned by institutional investors. 2.6% of American Superconductor Corporation shares are owned by insiders. Comparatively, 0.8% of Emerson Electric shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares American Superconductor Corporation and Emerson Electric’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
American Superconductor Corporation $75.19 million 1.02 -$27.37 million ($1.99) -1.85
Emerson Electric $15.26 billion 2.57 $1.52 billion C$2.56 23.96

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

Analyst Ratings

This is a summary of current ratings for American Superconductor Corporation and Emerson Electric, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Superconductor Corporation 0 1 5 0 2.83
Emerson Electric 2 9 4 0 2.13

American Superconductor Corporation currently has a consensus price target of $7.33, indicating a potential upside of 99.28%. Emerson Electric has a consensus price target of C$65.23, indicating a potential upside of 6.35%. Given American Superconductor Corporation’s stronger consensus rating and higher probable upside, research analysts plainly believe American Superconductor Corporation is more favorable than Emerson Electric.

Profitability

This table compares American Superconductor Corporation and Emerson Electric’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Superconductor Corporation -50.90% -58.10% -34.66%
Emerson Electric 9.94% 20.47% 9.05%

Dividends

Emerson Electric pays an annual dividend of C$1.92 per share and has a dividend yield of 3.1%. American Superconductor Corporation does not pay a dividend. Emerson Electric pays out 75.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Emerson Electric has raised its dividend for 60 consecutive years.

Volatility & Risk

American Superconductor Corporation has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500. Comparatively, Emerson Electric has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500.

Summary

Emerson Electric beats American Superconductor Corporation on 11 of the 16 factors compared between the two stocks.

American Superconductor Corporation Company Profile

American Superconductor Corporation (AMSC) is a provider of megawatt-scale solutions. The Company operates through two segments: Wind and Grid. Through the Company’s Windtec Solutions brand, the Wind business segment enables manufacturers to field wind turbines. Through the Company’s Gridtec Solutions, the Grid business segment enables electric utilities and renewable energy project developers to connect, transmit and distribute power. AMSC supplies power electronics and control systems, licenses its engineered wind turbine designs and provides customer support services to wind turbine manufacturers. The Company provides a range of power electronics and software-based control systems. AMSC provides transmission planning services that enable it to identify power grid congestion and other risks. The Company also sells grid interconnection solutions for wind farms and solar power plants, power quality systems, and transmission and distribution cable systems.

Emerson Electric Company Profile

Emerson Electric Co. is a diversified global manufacturing company, which provides solutions to customers by bringing technology and engineering together in the industrial, commercial and consumer markets around the world. The Company operates through four segments based on the nature of the products and services rendered: Process Management, Industrial Automation, Climate Technologies and Commercial & Residential Solutions. The Company’s principal production operations are electronics assembly, metal stamping, forming, casting, machining, welding, plating, heat treating, painting and assembly. In addition, the Company uses specialized production operations, including automatic and semiautomatic testing, automated material handling and storage, ferrous and nonferrous machining, and special furnaces for heat treating and foundry applications. The Company provides measurement, control and diagnostic technologies for automated industrial processes.

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