SMITH (A.O.) CORP (AOS) Stock Fundamental Analysis
USA - NYSE:AOS - US8318652091 - Common Stock
72.57 USD
-1.73 (-2.33%)
73.28 USD
+0.71 (+0.98%)
Taking everything into account, AOS scores 7 out of 10 in our fundamental rating. AOS was compared to 41 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. Finally AOS also has an excellent dividend rating. These ratings would make AOS suitable for dividend investing!
1. Profitability
1.1 Basic Checks
In the past year AOS was profitable.
AOS had a positive operating cash flow in the past year.
In the past 5 years AOS has always been profitable.
AOS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
AOS has a better Return On Assets (15.97%) than 97.56% of its industry peers.
With an excellent Return On Equity value of 28.09%, AOS belongs to the best of the industry, outperforming 85.37% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 22.56%, AOS belongs to the top of the industry, outperforming 95.12% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for AOS is significantly above the industry average of 12.76%.
The last Return On Invested Capital (22.56%) for AOS is above the 3 year average (18.84%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.97% | ||
| ROE | 28.09% | ||
| ROIC | 22.56% |
ROA(3y)13.62%
ROA(5y)13.16%
ROE(3y)24%
ROE(5y)23.45%
ROIC(3y)18.84%
ROIC(5y)18.44%
1.3 Margins
The Profit Margin of AOS (13.68%) is better than 70.73% of its industry peers.
AOS's Profit Margin has improved in the last couple of years.
The Operating Margin of AOS (18.82%) is better than 75.61% of its industry peers.
In the last couple of years the Operating Margin of AOS has grown nicely.
AOS has a Gross Margin of 38.20%. This is in the better half of the industry: AOS outperforms 70.73% 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 | 18.82% | ||
| PM (TTM) | 13.68% | ||
| GM | 38.2% |
OM growth 3Y2.19%
OM growth 5Y3.31%
PM growth 3Y0.51%
PM growth 5Y2.48%
GM growth 3Y0.98%
GM growth 5Y-0.68%
2. Health
2.1 Basic Checks
AOS has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it 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.
The debt/assets ratio for AOS is higher compared to a year ago.
2.2 Solvency
AOS has an Altman-Z score of 8.19. This indicates that AOS is financially healthy and has little risk of bankruptcy at the moment.
AOS has a better Altman-Z score (8.19) than 92.68% of its industry peers.
The Debt to FCF ratio of AOS is 0.61, which is an excellent value as it means it would take AOS, only 0.61 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.61, AOS belongs to the top of the industry, outperforming 92.68% of the companies in the same industry.
A Debt/Equity ratio of 0.15 indicates that AOS is not too dependend on debt financing.
The Debt to Equity ratio of AOS (0.15) is better than 73.17% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.15 | ||
| Debt/FCF | 0.61 | ||
| Altman-Z | 8.19 |
ROIC/WACC2.19
WACC10.3%
2.3 Liquidity
AOS has a Current Ratio of 1.65. This is a normal value and indicates that AOS is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.65, AOS is doing worse than 65.85% of the companies in the same industry.
A Quick Ratio of 1.03 indicates that AOS should not have too much problems paying its short term obligations.
AOS's Quick ratio of 1.03 is on the low side compared to the rest of the industry. AOS is outperformed by 68.29% of its industry peers.
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 | 1.65 | ||
| Quick Ratio | 1.03 |
3. Growth
3.1 Past
AOS shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -6.11%.
AOS shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.84% yearly.
AOS shows a decrease in Revenue. In the last year, the revenue decreased by -3.53%.
The Revenue has been growing slightly by 4.99% on average over the past years.
EPS 1Y (TTM)-6.11%
EPS 3Y7.65%
EPS 5Y10.84%
EPS Q2Q%0.94%
Revenue 1Y (TTM)-3.53%
Revenue growth 3Y2.56%
Revenue growth 5Y4.99%
Sales Q2Q%-1.27%
3.2 Future
The Earnings Per Share is expected to grow by 7.77% 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 3.98% on average per year.
EPS Next Y3.54%
EPS Next 2Y6.7%
EPS Next 3Y6.79%
EPS Next 5Y7.77%
Revenue Next Year0.72%
Revenue Next 2Y2.46%
Revenue Next 3Y2.98%
Revenue Next 5Y3.98%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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
A Price/Earnings ratio of 19.67 indicates a rather expensive valuation of AOS.
Compared to the rest of the industry, the Price/Earnings ratio of AOS indicates a somewhat cheap valuation: AOS is cheaper than 63.41% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of AOS to the average of the S&P500 Index (27.30), we can say AOS is valued slightly cheaper.
The Price/Forward Earnings ratio is 17.09, which indicates a rather expensive current valuation of AOS.
63.41% of the companies in the same industry are more expensive than AOS, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 22.73. AOS is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.67 | ||
| Fwd PE | 17.09 |
4.2 Price Multiples
AOS's Enterprise Value to EBITDA is on the same level as the industry average.
68.29% of the companies in the same industry are more expensive than AOS, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.56 | ||
| EV/EBITDA | 13.27 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates AOS does not grow enough to justify the current Price/Earnings ratio.
AOS has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)5.56
PEG (5Y)1.81
EPS Next 2Y6.7%
EPS Next 3Y6.79%
5. Dividend
5.1 Amount
AOS has a Yearly Dividend Yield of 1.87%. Purely for dividend investing, there may be better candidates out there.
AOS's Dividend Yield is rather good when compared to the industry average which is at 1.14. AOS pays more dividend than 95.12% of the companies in the same industry.
AOS's Dividend Yield is slightly below the S&P500 average, which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.87% |
5.2 History
On average, the dividend of AOS grows each year by 7.65%, which is quite nice.
AOS has been paying a dividend for at least 10 years, so it has 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)7.65%
Div Incr Years26
Div Non Decr Years26
5.3 Sustainability
AOS pays out 37.35% of its income as dividend. This is a sustainable payout ratio.
The dividend of AOS is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP37.35%
EPS Next 2Y6.7%
EPS Next 3Y6.79%
72.57
-1.73 (-2.33%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners99.99%
Inst Owner Change-2.73%
Ins Owners0.39%
Ins Owner Change-0.58%
Market Cap10.17B
Analysts71
Price Target81.52 (12.33%)
Short Float %2.4%
Short Ratio1.98
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.87% |
Yearly Dividend1.3
Dividend Growth(5Y)7.65%
DP37.35%
Div Incr Years26
Div Non Decr Years26
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5.45%
Min EPS beat(2)3.28%
Max EPS beat(2)7.62%
EPS beat(4)2
Avg EPS beat(4)0.69%
Min EPS beat(4)-5.88%
Max EPS beat(4)7.62%
EPS beat(8)5
Avg EPS beat(8)1.88%
EPS beat(12)8
Avg EPS beat(12)4.32%
EPS beat(16)12
Avg EPS beat(16)5.11%
Revenue beat(2)2
Avg Revenue beat(2)0.28%
Min Revenue beat(2)0.03%
Max Revenue beat(2)0.53%
Revenue beat(4)2
Avg Revenue beat(4)-1.49%
Min Revenue beat(4)-5.3%
Max Revenue beat(4)0.53%
Revenue beat(8)4
Avg Revenue beat(8)-0.72%
Revenue beat(12)6
Avg Revenue beat(12)-0.31%
Revenue beat(16)9
Avg Revenue beat(16)0.28%
PT rev (1m)5.52%
PT rev (3m)6.42%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.79%
EPS NY rev (1m)1.21%
EPS NY rev (3m)1.29%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.76%
Revenue NY rev (1m)0.13%
Revenue NY rev (3m)0.59%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.67 | ||
| Fwd PE | 17.09 | ||
| P/S | 2.68 | ||
| P/FCF | 20.56 | ||
| P/OCF | 17.06 | ||
| P/B | 5.51 | ||
| P/tB | 13.38 | ||
| EV/EBITDA | 13.27 |
EPS(TTM)3.69
EY5.08%
EPS(NY)4.25
Fwd EY5.85%
FCF(TTM)3.53
FCFY4.86%
OCF(TTM)4.25
OCFY5.86%
SpS27.05
BVpS13.17
TBVpS5.43
PEG (NY)5.56
PEG (5Y)1.81
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.97% | ||
| ROE | 28.09% | ||
| ROCE | 29.68% | ||
| ROIC | 22.56% | ||
| ROICexc | 24.36% | ||
| ROICexgc | 47.55% | ||
| OM | 18.82% | ||
| PM (TTM) | 13.68% | ||
| GM | 38.2% | ||
| FCFM | 13.05% |
ROA(3y)13.62%
ROA(5y)13.16%
ROE(3y)24%
ROE(5y)23.45%
ROIC(3y)18.84%
ROIC(5y)18.44%
ROICexc(3y)22.14%
ROICexc(5y)23.24%
ROICexgc(3y)45.61%
ROICexgc(5y)50.22%
ROCE(3y)24.79%
ROCE(5y)24.26%
ROICexcg growth 3Y-5.04%
ROICexcg growth 5Y5.48%
ROICexc growth 3Y-1.33%
ROICexc growth 5Y4.8%
OM growth 3Y2.19%
OM growth 5Y3.31%
PM growth 3Y0.51%
PM growth 5Y2.48%
GM growth 3Y0.98%
GM growth 5Y-0.68%
F-Score4
Asset Turnover1.17
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.15 | ||
| Debt/FCF | 0.61 | ||
| Debt/EBITDA | 0.36 | ||
| Cap/Depr | 125.62% | ||
| Cap/Sales | 2.68% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 75.06% | ||
| Profit Quality | 95.37% | ||
| Current Ratio | 1.65 | ||
| Quick Ratio | 1.03 | ||
| Altman-Z | 8.19 |
F-Score4
WACC10.3%
ROIC/WACC2.19
Cap/Depr(3y)107.07%
Cap/Depr(5y)97.72%
Cap/Sales(3y)2.2%
Cap/Sales(5y)2.13%
Profit Quality(3y)110.8%
Profit Quality(5y)119.02%
High Growth Momentum
Growth
EPS 1Y (TTM)-6.11%
EPS 3Y7.65%
EPS 5Y10.84%
EPS Q2Q%0.94%
EPS Next Y3.54%
EPS Next 2Y6.7%
EPS Next 3Y6.79%
EPS Next 5Y7.77%
Revenue 1Y (TTM)-3.53%
Revenue growth 3Y2.56%
Revenue growth 5Y4.99%
Sales Q2Q%-1.27%
Revenue Next Year0.72%
Revenue Next 2Y2.46%
Revenue Next 3Y2.98%
Revenue Next 5Y3.98%
EBIT growth 1Y-6.39%
EBIT growth 3Y4.81%
EBIT growth 5Y8.47%
EBIT Next Year10.26%
EBIT Next 3Y6.9%
EBIT Next 5Y6.26%
FCF growth 1Y-7.27%
FCF growth 3Y-5.75%
FCF growth 5Y3.87%
OCF growth 1Y-0.18%
OCF growth 3Y-3.18%
OCF growth 5Y4.98%