Exploring NYSE:AOS's dividend characteristics.

Last update: Dec 17, 2024

Our stock screener has singled out SMITH (A.O.) CORP (NYSE:AOS) as a promising choice for dividend investors. NYSE:AOS not only scores well in profitability, solvency, and liquidity but also offers a decent dividend. We'll explore this further.

Assessing Dividend Metrics for NYSE:AOS

ChartMill assigns a Dividend Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing various dividend elements, such as yield, historical performance, dividend growth, and sustainability. NYSE:AOS has been awarded a 7 for its dividend quality:

Compared to an average industry Dividend Yield of 0.97, AOS pays a better dividend. On top of this AOS pays more dividend than 100.00% of the companies listed in the same industry.
The dividend of AOS is nicely growing with an annual growth rate of 9.92%!
AOS has paid a dividend for at least 10 years, which is a reliable track record.
AOS has not decreased their dividend for at least 10 years, which is a reliable track record.
33.62% of the earnings are spent on dividend by AOS. This is a low number and sustainable payout ratio.

Looking at the Health

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NYSE:AOS was assigned a score of 8 for health:

AOS has an Altman-Z score of 7.95. This indicates that AOS is financially healthy and has little risk of bankruptcy at the moment.
AOS has a better Altman-Z score (7.95) than 84.62% of its industry peers.
The Debt to FCF ratio of AOS is 0.25, which is an excellent value as it means it would take AOS, only 0.25 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 0.25, AOS belongs to the best of the industry, outperforming 87.18% of the companies in the same industry.
AOS has a Debt/Equity ratio of 0.06. This is a healthy value indicating a solid balance between debt and equity.
AOS has a Debt to Equity ratio of 0.06. This is in the better half of the industry: AOS outperforms 79.49% of its industry peers.
AOS does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

How do we evaluate the Profitability for NYSE:AOS?

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:AOS scores a 8 out of 10:

AOS has a Return On Assets of 17.79%. This is amongst the best in the industry. AOS outperforms 89.74% of its industry peers.
Looking at the Return On Equity, with a value of 29.28%, AOS belongs to the top of the industry, outperforming 82.05% of the companies in the same industry.
AOS has a better Return On Invested Capital (24.35%) than 94.87% of its industry peers.
AOS had an Average Return On Invested Capital over the past 3 years of 17.74%. This is above the industry average of 13.58%.
The 3 year average ROIC (17.74%) for AOS is below the current ROIC(24.35%), indicating increased profibility in the last year.
AOS has a better Profit Margin (14.41%) than 76.92% of its industry peers.
AOS's Operating Margin of 19.04% is fine compared to the rest of the industry. AOS outperforms 74.36% of its industry peers.
AOS's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 38.21%, AOS is in the better half of the industry, outperforming 66.67% of the companies in the same industry.

Our Best Dividend screener lists more Best Dividend stocks and is updated daily.

Our latest full fundamental report of AOS contains the most current fundamental analsysis.

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.