# S&P 500 Industrials Sector: GE vs EMR



## gibor365 (Apr 1, 2011)

I have very small exposure to S&P 500 Industrials Sector... did some reading and to my attention came 2 stocks GE vs EMR that look fairy values and maybe a bit undervalued.... what do you think which one is better buy now?


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## leeder (Jan 28, 2012)

GE looks slightly cheaper right now, compared to EMR. However, EMR's balance sheet has much less debt than GE's. EMR looks like it has better track record than GE, so I would pick EMR between the two.

Have you considered the US railroad stocks? NSC doesn't look too bad.


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## gibor365 (Apr 1, 2011)

> GE looks slightly cheaper right now, compared to EMR. However, EMR's balance sheet has much less debt


 This is exactly what I noticed 
I was watching NSC last year, but it always seem a bit too expensive and yield is too small...


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## leeder (Jan 28, 2012)

gibor said:


> This is exactly what I noticed
> I was watching NSC last year, but it always seem a bit too expensive and yield is too small...


NSC's valuations aren't too far off, to be honest. It is trading at the high end of historical valuations, but what decent stock isn't? In terms of the yield, NSC has demonstrated good (if not better) divvy growth relative to the other two. Definitely a better choice than GE; very comparable to EMR imho.


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## gibor365 (Apr 1, 2011)

but not last year...NSC increased divi by 3.5%, GE by 4.5% and EMR by 9.3!


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## fatcat (Nov 11, 2009)

i have been in and out of ge a couple of times
it can't get liftoff and seems stuck at 23-25
did you see this article: http://seekingalpha.com/article/293...ividend-growth-s-and-p-500-industrials-sector


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## leeder (Jan 28, 2012)

gibor said:


> but not last year...NSC increased divi by 3.5%, GE by 4.5% and EMR by 9.3!


That's not quite correct with NSC's dividend growth. NSC has generally increased its dividend every other quarter in the past number of years. In 2013, the total annual payout was $2.04 per share. In 2014, the total payout was $2.22 per share. That's about 8.8% increase. Agreed that it's slightly less than EMR, but it's certainly more comparable than you calculated. From 2009 to 2014, the average annual increase for NSC has been about 12.6% (2009 payout was $1.36 per share). In the same timeframe, EMR's average annual increase has been about 6.1% (2009 payout was $1.32 per share).


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## londoncalling (Sep 17, 2011)

Of the 3 I would take Emerson. I was watching both EMR and GE for the past couple years and always got distracted by higher yields back home in Canada It is trading closer to its 52 week low than NSC. I don't hold any US utilities but do have CSX for US rail. I bought 1 US stock(AT&T) at the start of the year and am now looking to the UK and Europe for the rest of my international exposure(either ADRs or Can cos with International exposure). FWIW any of the 3 would be good picks for a longer term hold 5+yrs. Which one will do best I cannot determine. Cheers


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## My Own Advisor (Sep 24, 2012)

I'm with londoncalling. I like EMR over GE but would happily own both for the next 10+ years. These are companies you simply can't own in Canada; we don't have the scale here. I would also like to own CNR, lots of it, at some point. 

I also want to start filling up my USD $$ TFSA next year with UK ADRs.


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