SMITH (A.O.) CORP (AOS)
US8318652091 - Common Stock
We assign a fundamental rating of 7 out of 10 to AOS. AOS was compared to 39 industry peers in the Building Products industry. AOS has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. AOS is not valued too expensively and it also shows a decent growth rate. 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.
Each year in the past 5 years AOS has been profitable.
In the past 5 years AOS always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 17.79%, AOS belongs to the top of the industry, outperforming 89.74% of the companies in the same industry.
With an excellent Return On Equity value of 29.28%, AOS belongs to the best of the industry, outperforming 82.05% of the companies in the same industry.
AOS has a Return On Invested Capital of 24.35%. This is amongst the best in the industry. AOS outperforms 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 13.66%.
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
AOS has a Profit Margin of 14.41%. This is in the better half of the industry: AOS outperforms 76.92% of its industry peers.
In the last couple of years the Profit Margin of AOS has remained more or less at the same level.
AOS's Operating Margin of 19.04% is fine compared to the rest of the industry. AOS outperforms 74.36% of its industry peers.
In the last couple of years the Operating Margin of AOS has grown nicely.
AOS's Gross Margin of 38.21% is fine compared to the rest of the industry. AOS outperforms 66.67% 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
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
AOS has less shares outstanding than it did 5 years ago.
The debt/assets ratio for AOS has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 8.01 indicates that AOS is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 8.01, AOS belongs to the best of the industry, outperforming 84.62% of the companies in the same industry.
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 better Debt to Equity ratio (0.06) than 79.49% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.25 | ||
| Altman-Z | 8.01 |
ROIC/WACC2.35
WACC10.37%
2.3 Liquidity
AOS has a Current Ratio of 1.67. 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 1.67, AOS is doing worse than 69.23% of the companies in the same industry.
AOS has a Quick Ratio of 1.02. This is a normal value and indicates that AOS is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of AOS (1.02) is worse than 74.36% 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 | 1.67 | ||
| 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
Based on estimates for the next years, AOS will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.36% on average per year.
Based on estimates for the next years, AOS will show a small growth in Revenue. The Revenue will grow by 5.74% on average per year.
EPS Next Y-0.16%
EPS Next 2Y3.71%
EPS Next 3Y5.08%
EPS Next 5Y8.36%
Revenue Next Year0.26%
Revenue Next 2Y1.75%
Revenue Next 3Y2.74%
Revenue Next 5Y5.74%
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 stable.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
AOS is valuated rather expensively with a Price/Earnings ratio of 19.08.
Based on the Price/Earnings ratio, AOS is valued a bit cheaper than the industry average as 61.54% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 29.20, AOS is valued a bit cheaper.
AOS is valuated rather expensively with a Price/Forward Earnings ratio of 17.88.
AOS's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.00, AOS is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.08 | ||
| Fwd PE | 17.88 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AOS indicates a somewhat cheap valuation: AOS is cheaper than 69.23% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of AOS indicates a somewhat cheap valuation: AOS is cheaper than 61.54% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.08 | ||
| EV/EBITDA | 10.37 |
4.3 Compensation for Growth
AOS has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.41
EPS Next 2Y3.71%
EPS Next 3Y5.08%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.86%, AOS has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 0.94, AOS pays a better dividend. On top of this AOS pays more dividend than 100.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.23, AOS has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.86% |
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 Years25
Div Non Decr Years25
5.3 Sustainability
AOS pays out 33.62% of its income as dividend. This is a sustainable payout ratio.
The dividend of AOS is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP33.62%
EPS Next 2Y3.71%
EPS Next 3Y5.08%
SMITH (A.O.) CORP
NYSE:AOS (11/22/2024, 8:23:23 PM)
After market: 73.44 0 (0%)73.44
+0.47 (+0.64%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap8.75B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.86% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.08 | ||
| Fwd PE | 17.88 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)2.41
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.79% | ||
| ROE | 29.28% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 19.04% | ||
| PM (TTM) | 14.41% | ||
| GM | 38.21% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.23
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.67 | ||
| Quick Ratio | 1.02 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)3.77%
EPS 3Y20.74%
EPS 5Y
EPS Q2Q%
EPS Next Y-0.16%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)2.45%
Revenue growth 3Y9.99%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y