The Fed can keep raising rates, but it won't change the fact that a lot of companies out there (in a wide variety of industries) have been underinvesting in their basic infrastructure. You can underinvest for a while, but sooner or later, you either have to spend the money on new and improved gear, or cut back production. With many companies treating market share as their most precious commodity, Emerson
Performance in the company's fiscal third quarter was encouraging to this Fool. Reported revenue rose nearly 17%, with organic growth of around 12%. That performance puts it in the upper tier with other industrial conglomerates like Dover
As I suggested in the opening paragraph, Emerson is serving a variety of industries that are either catching up on delayed internal capital expenditures and/or trying to expand their businesses. Companies in the energy and chemicals sector need more process-control equipment, and that doesn't seem likely to abate when you consider the number of new power plants on the books and energy/chemical projects around the world.
What's more, data-storage vendors like EMC
Emerson isn't the cheapest industrial stock that I follow, nor is it my favorite, but it's hard to ignore both the strong recent order growth and the outlook for demand in many of its segments. Though investors may continue to fear the effect of rate hikes and energy prices on economic health, I think Emerson has a chance of staying electrified, if only on the basis of catch-up spending in many of its key markets.
For more industrial Foolishness:
- Does Parker-Hannifin Have a Second Act?
- No Do-Over for Dover
- Emerson Electric: The Strong Get Stronger
Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).