SMITH (A.O.) CORP (AOS) Stock Fundamental Analysis
NYSE:AOS - New York Stock Exchange, Inc. - US8318652091 - Common Stock - Currency: USD
Overall AOS gets a fundamental rating of 6 out of 10. We evaluated AOS against 40 industry peers in the Building Products industry. AOS gets an excellent profitability rating and is at the same time showing great financial health properties. AOS is valued correctly, but it does not seem to be growing. AOS also has an excellent dividend rating. These ratings could make AOS a good candidate for dividend investing.
1. Profitability
1.1 Basic Checks
AOS had positive earnings in the past year.
In the past year AOS had a positive cash flow from operations.
Each year in the past 5 years AOS has been profitable.
AOS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 17.79%, AOS belongs to the best of the industry, outperforming 90.00% of the companies in the same industry.
AOS has a better Return On Equity (29.28%) than 82.50% of its industry peers.
Looking at the Return On Invested Capital, with a value of 24.35%, AOS belongs to the top of the industry, outperforming 95.00% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for AOS is above the industry average of 13.19%.
The 3 year average ROIC (17.74%) for AOS is below the current ROIC(24.35%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.79% | ||
| ROE | 29.28% | ||
| ROIC | 24.35% |
ROA(3y)12.8%
ROA(5y)12.28%
ROE(3y)23.42%
ROE(5y)22.22%
ROIC(3y)17.74%
ROIC(5y)16.91%
1.3 Margins
With a decent Profit Margin value of 14.41%, AOS is doing good in the industry, outperforming 77.50% of the companies in the same industry.
In the last couple of years the Profit Margin of AOS has remained more or less at the same level.
With a decent Operating Margin value of 19.04%, AOS is doing good in the industry, outperforming 75.00% of the companies in the same industry.
In the last couple of years the Operating Margin of AOS has grown nicely.
AOS has a Gross Margin of 38.21%. This is in the better half of the industry: AOS outperforms 67.50% of its industry peers.
In the last couple of years the Gross Margin of AOS has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.04% | ||
| PM (TTM) | 14.41% | ||
| GM | 38.21% |
OM growth 3Y7.77%
OM growth 5Y2%
PM growth 3Y6.64%
PM growth 5Y0.73%
GM growth 3Y0.23%
GM growth 5Y-1.21%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so AOS is creating value.
Compared to 1 year ago, AOS has less shares outstanding
The number of shares outstanding for AOS has been reduced compared to 5 years ago.
AOS has a better debt/assets ratio than last year.
2.2 Solvency
AOS has an Altman-Z score of 7.80. This indicates that AOS is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 7.80, AOS belongs to the best of the industry, outperforming 85.00% of the companies in the same industry.
AOS has a debt to FCF ratio of 0.25. This is a very positive value and a sign of high solvency as it would only need 0.25 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 0.25, AOS belongs to the best of the industry, outperforming 87.50% 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's Debt to Equity ratio of 0.06 is fine compared to the rest of the industry. AOS outperforms 80.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.25 | ||
| Altman-Z | 7.8 |
ROIC/WACC2.23
WACC10.94%
2.3 Liquidity
A Current Ratio of 1.67 indicates that AOS should not have too much problems paying its short term obligations.
With a Current ratio value of 1.67, AOS is not doing good in the industry: 70.00% of the companies in the same industry are doing better.
A Quick Ratio of 1.02 indicates that AOS should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.02, AOS is doing worse than 75.00% of the companies in the same industry.
The current and quick ratio evaluation for AOS is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.67 | ||
| Quick Ratio | 1.02 |
3. Growth
3.1 Past
AOS shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.77%.
AOS shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.92% yearly.
AOS shows a small growth in Revenue. In the last year, the Revenue has grown by 2.45%.
AOS shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.86% yearly.
EPS 1Y (TTM)3.77%
EPS 3Y20.74%
EPS 5Y7.92%
EPS Q2Q%-8.89%
Revenue 1Y (TTM)2.45%
Revenue growth 3Y9.99%
Revenue growth 5Y3.86%
Sales Q2Q%-3.72%
3.2 Future
The Earnings Per Share is expected to grow by 6.57% on average over the next years.
Based on estimates for the next years, AOS will show a small growth in Revenue. The Revenue will grow by 2.77% on average per year.
EPS Next Y-0.32%
EPS Next 2Y3.65%
EPS Next 3Y5.32%
EPS Next 5Y6.57%
Revenue Next Year0.31%
Revenue Next 2Y1.76%
Revenue Next 3Y2.92%
Revenue Next 5Y2.77%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 17.48, AOS is valued on the expensive side.
AOS's Price/Earnings ratio is in line with the industry average.
AOS's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.51.
The Price/Forward Earnings ratio is 16.40, which indicates a correct valuation of AOS.
Based on the Price/Forward Earnings ratio, AOS is valued a bit cheaper than 62.50% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 93.88, AOS is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.48 | ||
| Fwd PE | 16.4 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AOS is valued a bit cheaper than 72.50% of the companies in the same industry.
AOS's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. AOS is cheaper than 65.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.57 | ||
| EV/EBITDA | 9.82 |
4.3 Compensation for Growth
The excellent profitability rating of AOS may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.21
EPS Next 2Y3.65%
EPS Next 3Y5.32%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.91%, AOS has a reasonable but not impressive dividend return.
AOS's Dividend Yield is rather good when compared to the industry average which is at 1.04. AOS pays more dividend than 100.00% of the companies in the same industry.
AOS's Dividend Yield is comparable with the S&P500 average which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.91% |
5.2 History
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)9.92%
Div Incr Years26
Div Non Decr Years26
5.3 Sustainability
AOS pays out 33.62% of its income as dividend. This is a sustainable payout ratio.
AOS's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP33.62%
EPS Next 2Y3.65%
EPS Next 3Y5.32%
SMITH (A.O.) CORP
NYSE:AOS (1/30/2025, 8:04:29 PM)
After market: 67.31 0 (0%)67.31
-1.91 (-2.76%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners98.4%
Inst Owner Change-0.21%
Ins Owners0.6%
Ins Owner Change-1.05%
Market Cap8.02B
Analysts69.47
Price Target82.61 (22.73%)
Short Float %3.51%
Short Ratio4.1
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.91% |
Yearly Dividend1.23
Dividend Growth(5Y)9.92%
DP33.62%
Div Incr Years26
Div Non Decr Years26
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.63%
Min EPS beat(2)-2.25%
Max EPS beat(2)-1.02%
EPS beat(4)2
Avg EPS beat(4)-0.47%
Min EPS beat(4)-2.25%
Max EPS beat(4)0.96%
EPS beat(8)6
Avg EPS beat(8)6.01%
EPS beat(12)9
Avg EPS beat(12)5.14%
EPS beat(16)13
Avg EPS beat(16)7.33%
Revenue beat(2)1
Avg Revenue beat(2)0.2%
Min Revenue beat(2)-1.22%
Max Revenue beat(2)1.62%
Revenue beat(4)1
Avg Revenue beat(4)-0.76%
Min Revenue beat(4)-2.7%
Max Revenue beat(4)1.62%
Revenue beat(8)4
Avg Revenue beat(8)0.25%
Revenue beat(12)6
Avg Revenue beat(12)0.25%
Revenue beat(16)9
Avg Revenue beat(16)1.25%
PT rev (1m)-2.06%
PT rev (3m)-6.08%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.28%
EPS NY rev (1m)0%
EPS NY rev (3m)-7.11%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.12%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)-3.2%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.48 | ||
| Fwd PE | 16.4 | ||
| P/S | 2.06 | ||
| P/FCF | 16.57 | ||
| P/OCF | 13.56 | ||
| P/B | 4.18 | ||
| P/tB | 8.55 | ||
| EV/EBITDA | 9.82 |
EPS(TTM)3.85
EY5.72%
EPS(NY)4.1
Fwd EY6.1%
FCF(TTM)4.06
FCFY6.04%
OCF(TTM)4.96
OCFY7.37%
SpS32.69
BVpS16.09
TBVpS7.87
PEG (NY)N/A
PEG (5Y)2.21
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.79% | ||
| ROE | 29.28% | ||
| ROCE | 32.1% | ||
| ROIC | 24.35% | ||
| ROICexc | 27.38% | ||
| ROICexgc | 52.31% | ||
| OM | 19.04% | ||
| PM (TTM) | 14.41% | ||
| GM | 38.21% | ||
| FCFM | 12.43% |
ROA(3y)12.8%
ROA(5y)12.28%
ROE(3y)23.42%
ROE(5y)22.22%
ROIC(3y)17.74%
ROIC(5y)16.91%
ROICexc(3y)22.46%
ROICexc(5y)22.09%
ROICexgc(3y)48.67%
ROICexgc(5y)47.52%
ROCE(3y)23.38%
ROCE(5y)22.28%
ROICexcg growth 3Y8.35%
ROICexcg growth 5Y3.57%
ROICexc growth 3Y11.48%
ROICexc growth 5Y2.82%
OM growth 3Y7.77%
OM growth 5Y2%
PM growth 3Y6.64%
PM growth 5Y0.73%
GM growth 3Y0.23%
GM growth 5Y-1.21%
F-Score7
Asset Turnover1.23
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.25 | ||
| Debt/EBITDA | 0.13 | ||
| Cap/Depr | 133.62% | ||
| Cap/Sales | 2.76% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 71.95% | ||
| Profit Quality | 86.23% | ||
| Current Ratio | 1.67 | ||
| Quick Ratio | 1.02 | ||
| Altman-Z | 7.8 |
F-Score7
WACC10.94%
ROIC/WACC2.23
Cap/Depr(3y)93.51%
Cap/Depr(5y)86.76%
Cap/Sales(3y)1.96%
Cap/Sales(5y)2%
Profit Quality(3y)119.94%
Profit Quality(5y)122.44%
High Growth Momentum
Growth
EPS 1Y (TTM)3.77%
EPS 3Y20.74%
EPS 5Y7.92%
EPS Q2Q%-8.89%
EPS Next Y-0.32%
EPS Next 2Y3.65%
EPS Next 3Y5.32%
EPS Next 5Y6.57%
Revenue 1Y (TTM)2.45%
Revenue growth 3Y9.99%
Revenue growth 5Y3.86%
Sales Q2Q%-3.72%
Revenue Next Year0.31%
Revenue Next 2Y1.76%
Revenue Next 3Y2.92%
Revenue Next 5Y2.77%
EBIT growth 1Y115.77%
EBIT growth 3Y18.54%
EBIT growth 5Y5.93%
EBIT Next Year8.02%
EBIT Next 3Y6.62%
EBIT Next 5Y5.75%
FCF growth 1Y21.49%
FCF growth 3Y5.76%
FCF growth 5Y10.45%
OCF growth 1Y23.42%
OCF growth 3Y6.04%
OCF growth 5Y8.35%