This Japanese Robotics Stock Looks Interesting: Fanuc Corp, Rockwell Automation (ROK), Emerson Electric Co. (EMR)

Much cheaper than its U.S. peers

At around $25 per share, Fanuc is worth nearly $30 billion on the market. The market values Fanuc at only 7.64 times EV/EBITDA. Compared to its peers in the U.S., including Rockwell Automation (NYSE:ROK) and Emerson Electric Co. (NYSE:EMR), Fanuc has the lowest valuation. Rockwell Automation (NYSE:ROK), at around $87 per share, has a total market cap of around $12.5 billion. It has the most expensive valuation at 10.7 times EV/EBITDA. Emerson is the largest company with $41.3 billion in total market cap. At around $57 per share, the market values Emerson Electric Co. (NYSE:EMR) at 9 times EV/EBITDA.

What investors would notice about Fanuc is its extremely high operating margin. While operating margins of Rockwell Automation (NYSE:ROK) and Emerson Electric Co. (NYSE:EMR) were 16.23% and 16.68%, Fanuc Corp (TYO:6954) generated nearly 38.3% operating margin in the past twelve months. Furthermore, Fanuc has the most conservative balance sheet among the three. Whereas Fanuc doesn’t use any debt in its operations, the debt/equity ratio of Rockwell Automation (NYSE:ROK) and Emerson Electric Co. (NYSE:EMR) are 0.5 and 0.3, respectively.

Looking forward

Japan is already an established brand for quality automation and robotics. When the world’s living standard is moving higher, there’s certainly an increasing demand for automation and robotics. With a cheap valuation, high profitability, and rising revenue and profits, Fanuc Corp (TYO:6954) seems to be a decent bet for long term investors.

The article This Japanese Robotics Stock Looks Interesting originally appeared on Fool.com and is written by Anh HOANG.

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