Comparing Kinder Morgan Management (KMR) & Emerson Electric (EMR)

Kinder Morgan Management (NYSE: KMR) and Emerson Electric (NYSE:EMR) are both large-cap electrical components & equipment – nec companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, earnings and institutional ownership.

Volatility and Risk

Kinder Morgan Management has a beta of 0.61, meaning that its stock price is 39% less 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.

Analyst Ratings

This is a summary of recent recommendations and price targets for Kinder Morgan Management and Emerson Electric, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kinder Morgan Management 0 0 0 0 N/A
Emerson Electric 2 8 4 0 2.14

Emerson Electric has a consensus target price of $66.92, suggesting a potential downside of 3.98%. Given Emerson Electric’s higher probable upside, analysts plainly believe Emerson Electric is more favorable than Kinder Morgan Management.

Dividends

Emerson Electric pays an annual dividend of $1.94 per share and has a dividend yield of 2.8%. Kinder Morgan Management does not pay a dividend. Emerson Electric pays out 82.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kinder Morgan Management has increased its dividend for 60 consecutive years.

Insider & Institutional Ownership

69.2% of Emerson Electric shares are held by institutional investors. 0.8% of Emerson Electric shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Kinder Morgan Management and Emerson Electric’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kinder Morgan Management N/A N/A N/A $1.85 56.60
Emerson Electric $15.26 billion 2.92 $1.52 billion $2.35 29.66

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

Profitability

This table compares Kinder Morgan Management and Emerson Electric’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kinder Morgan Management N/A N/A N/A
Emerson Electric 9.94% 20.47% 9.05%

Summary

Emerson Electric beats Kinder Morgan Management on 11 of the 14 factors compared between the two stocks.

About Kinder Morgan Management

Kinder Morgan Management, LLC is a limited partner in Kinder Morgan Energy Partners, L.P (KMP), and manages and controls its business and affairs pursuant to a delegation of control agreement. Kinder Morgan G.P., Inc., of which Kinder Morgan, Inc. indirectly owns all of the outstanding common equity, is the general partner of Kinder Morgan Energy Partners, L.P. (KMP). Kinder Morgan G.P., Inc., pursuant to a delegation of control agreement among the Company, Kinder Morgan G.P., Inc. and KMP, has delegated to the Company, to the fullest extent permitted under Delaware law and KMP’s limited partnership agreement, all of its rights and powers to manage and control the business and affairs of KMP, subject to the general partner’s right to approve specified actions.

About Emerson Electric

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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