GETTING STARTED Build a Strong Stock Portfolio Earnings: The Bottom Line Ten Clues to Strong Stocks Four Questions to Ask Before You Buy A Kid-Friendly Introduction to Stocks MORE... STOCK TOOLS Kiplinger's Stock Finder Test your risk tolerance What is the current yield from dividends? Which are better: income or growth stocks? Pick the Best 'Bankerage' Company Recent Columns Hilton: Rooms to Grow - Feb. 4, 2005 PepsiCo: Blue-Chip Carbs - Feb. 3, 2005 Google: On the Fast Track - Feb. 2, 2005 Sprint: What's Next(el)? - Feb. 1, 2005 Bank of America: Earning Interest - Jan. 31, 2005 Home Depot: Building on Success - Jan. 28, 2005 MORE ... STOCKS TO WATCH E-MAIL   Sign Up   Now you can have Stocks to Watch delivered to your inbox every day. Sign up now.

STOCKS TO WATCH

Emerson Electric: Industrial-Strength Dividend Payer

You won't find many better ways to cash in on a global industrial and construction boom than with Emerson Electric (EMR).

Based in St. Louis, the company makes commercial heating and air-conditioning systems, parts for power plants, motors for appliances, factory automation systems and other industrial wares. It books 45% of its sales outside the U.S. -- much of it in China, India and Eastern Europe.

With the weak dollar, Emerson's ability to ring up sales in various currencies should enhance profits (because sales in stronger currencies translate into more dollars).

Emerson is a well-managed company that continually dumps low-return businesses and expands into more profitable lines. It generates some $2 billion a year in free cash flow.

The company has raised its dividend, currently $1.66 per share annually, for 49 straight years. At $68, the stock trades at 17 times analysts' consensus earnings estimate for 2005.

--Jeffrey Kosnett

Emerson Electric Click for larger chart Today's quote Use Stock Finder to make your own stock picks Last closing price: $48.62 200-day moving av.: $40 3-yr. annual return: 7% Trailing 12 mo. P/E: 22 Forward P/E: 15 Price-to-book ratio: 4 Price-to-sales ratio: 14.90 5-yr earnings growth: 10% PEG ratio: 0.00 More