Electric Dividends

Don’t let its name confuse you: Emerson Electric (NYSE: EMR) isn’t a utility. Founded in 1890, it is primarily an automation solutions provider that serves nearly every industry you can think of. The company operates another big segment — commercial and residential solutions — which provides appliances and services related primarily to heating, air conditioning, ventilation and refrigeration. Its market value was recently north of $40 billion.

Emerson has had to deal with sluggish industry conditions for quite a while, which has resulted in a contraction in sales for the company. Yet in its most recent quarter, it turned things around, enjoying 10 percent sales growth and remaining largely consistent with what executives had hoped to see.

Automation solutions are gaining in popularity, and Emerson believes that growth there and in the commercial and residential solutions market should accelerate into 2018. (A strong foothold in automation means Emerson already has a presence in hot markets such as the Internet of Things.) If that proves to be the case, then Emerson could be in line to rebound from weakness, and that could add share-price gains to the dividend income that investors already receive from the stock.

The company’s dividend recently yielded 3 percent, and it has been increasing its payout annually for more than 60 years. (The Motley Fool has recommended Emerson Electric.)