Emerson Electric (NYSE: EMR) and Polar Power (NASDAQ:POLA) are both large-cap industrial products companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.

Dividends

Emerson Electric pays an annual dividend of $1.92 per share and has a dividend yield of 3.0%. Polar Power does not pay a dividend. Emerson Electric pays out 85.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Polar Power has raised its dividend for 60 consecutive years.

Insider and Institutional Ownership

70.0% of Emerson Electric shares are owned by institutional investors. Comparatively, 8.7% of Polar Power shares are owned by institutional investors. 0.8% of Emerson Electric shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Emerson Electric 8.89% 22.32% 9.25%
Polar Power N/A 19.35% 16.54%

Analyst Recommendations

This is a breakdown of recent recommendations for Emerson Electric and Polar Power, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Emerson Electric 2 8 4 0 2.14
Polar Power 0 0 1 0 3.00

Emerson Electric presently has a consensus price target of $64.45, suggesting a potential upside of 1.31%. Polar Power has a consensus price target of $7.00, suggesting a potential upside of 35.40%. Given Polar Power’s stronger consensus rating and higher possible upside, analysts plainly believe Polar Power is more favorable than Emerson Electric.

Valuation and Earnings

This table compares Emerson Electric and Polar Power’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Emerson Electric $20.20 billion 2.02 $1.64 billion $2.25 28.28
Polar Power $22.80 million 2.30 $4.40 million N/A N/A

Emerson Electric has higher revenue and earnings than Polar Power.

Summary

Emerson Electric beats Polar Power on 8 of the 14 factors compared between the two stocks.

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.

Polar Power Company Profile

Polar Power, Inc. is engaged in designing, manufacturing and selling direct current (DC) power systems for applications primarily in the telecommunications, military, electric vehicle charging, cogeneration, distributed power and uninterruptable power supply markets. Within the telecommunications market, the Company’s DC power systems provide DC power to service applications that do not have access to the utility grid (such as off-grid applications) or have critical power needs and cannot be without power in the event of utility grid failure (such as back-up power applications). Its product offerings include DC base power systems, DC hybrid power systems and DC solar hybrid power systems. The Company’s technologies include Permanent Magnet Homopolar Hybrid (PMHH) Technology and Supra Controller Technology. Its power and control system architecture is controlled by its digital control system, Supra Controller, which contains software configured to meet specific application needs.

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