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Honeywell International Inc. (HON), Danaher Corporation (DHR), Emerson Electric Co. (EMR): How Will China Play Out for These Companies?

In this context, the company’s future prospects in China are only relevant. The company sees revenue growth of 4% to 6% in 2013. This is well below the double-digit growth rate that the company had earlier predicted as the Chinese economy has not accelerated according to expectations. Overall, the company didn’t change its revenue outlook for 2013, which was lowered at its recent earnings release (three weeks ago). Emerson Electric Co. (NYSE:EMR) now expects a revenue growth rate of 1.5%  to 2.5% and EPS of $3.48 to $3.58.

On an overall note, Emerson Electric Co. (NYSE:EMR) still has a lot of work ahead to regain its past premium valuation but it appears to be executing better than previous years and on the right track. Given that it is managing under realistic assumptions, the guidance is much more attainable than many of its peers. Moreover, the company’s dividend yield of 2.8% lies in the top-decile of the industry.

Final word

For sure, the Chinese economy has not displayed a growth rate that was anticipated by the market at the start of the year. There are several companies that are expecting incremental revenue from this region. I am bullish on all three of them – Honeywell International Inc. (NYSE:HON), Danaher Corporation (NYSE:DHR) and Emerson Electric Co. (NYSE:EMR).

Honeywell International Inc. (NYSE:HON)’s bottom line has largely improved on the back of some superbly executed organizational efficiency programs. Danaher Corporation (NYSE:DHR) is a good investment given that it is exposed to the medical equipment industry, which is one of the few industries that are really flying in China. Emerson Electric Co. (NYSE:EMR) remains a good buy given its conservative estimates and cheap valuations.

The article How Will China Play Out for These Companies? originally appeared on Fool.com and is written by Zain Abbas.

Zain Abbas has no position in any stocks mentioned. The Motley Fool recommends Emerson Electric Co (NYSE:EMR). Zain is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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