SMITH (A.O.) CORP (AOS) Stock Fundamental Analysis
NYSE:AOS - New York Stock Exchange, Inc. - US8318652091 - Common Stock - Currency: USD
AOS gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals 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 has a valuation in line with the averages, 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.
AOS had positive earnings in each of the past 5 years.
In the past 5 years AOS always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of AOS (16.47%) is better than 92.50% of its industry peers.
AOS has a better Return On Equity (28.33%) than 80.00% of its industry peers.
AOS has a Return On Invested Capital of 23.53%. This is amongst the best in the industry. AOS outperforms 95.00% of its industry peers.
AOS had an Average Return On Invested Capital over the past 3 years of 18.84%. This is significantly above the industry average of 13.09%.
The 3 year average ROIC (18.84%) for AOS is below the current ROIC(23.53%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.47% | ||
| ROE | 28.33% | ||
| ROIC | 23.53% |
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
AOS's Profit Margin of 13.98% is fine compared to the rest of the industry. AOS outperforms 72.50% of its industry peers.
In the last couple of years the Profit Margin of AOS has grown nicely.
AOS's Operating Margin of 19.00% is fine compared to the rest of the industry. AOS outperforms 75.00% of its industry peers.
AOS's Operating Margin has improved in the last couple of years.
AOS has a better Gross Margin (38.14%) than 70.00% of its industry peers.
AOS's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19% | ||
| PM (TTM) | 13.98% | ||
| GM | 38.14% |
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
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
Compared to 5 years ago, AOS has less shares outstanding
The debt/assets ratio for AOS is higher compared to a year ago.
2.2 Solvency
AOS has an Altman-Z score of 7.13. This indicates that AOS is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of AOS (7.13) is better than 80.00% of its industry peers.
The Debt to FCF ratio of AOS is 0.41, which is an excellent value as it means it would take AOS, only 0.41 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of AOS (0.41) is better than 87.50% of its industry peers.
AOS has a Debt/Equity ratio of 0.10. This is a healthy value indicating a solid balance between debt and equity.
AOS has a Debt to Equity ratio of 0.10. This is in the better half of the industry: AOS outperforms 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.1 | ||
| Debt/FCF | 0.41 | ||
| Altman-Z | 7.13 |
ROIC/WACC2.26
WACC10.42%
2.3 Liquidity
A Current Ratio of 1.55 indicates that AOS should not have too much problems paying its short term obligations.
With a Current ratio value of 1.55, AOS is not doing good in the industry: 72.50% of the companies in the same industry are doing better.
AOS has a Quick Ratio of 1.55. This is a bad value and indicates that AOS is not financially healthy enough and could expect problems in meeting its short term obligations.
AOS has a worse Quick ratio (0.96) than 75.00% 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 | 1.55 | ||
| Quick Ratio | 0.96 |
3. Growth
3.1 Past
AOS shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.36%.
AOS shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.84% yearly.
The Revenue has decreased by -0.90% in the past year.
Measured over the past years, AOS shows a small growth in Revenue. The Revenue has been growing by 4.99% on average per year.
EPS 1Y (TTM)-2.36%
EPS 3Y7.65%
EPS 5Y10.84%
EPS Q2Q%-12.37%
Revenue 1Y (TTM)-0.9%
Revenue growth 3Y2.56%
Revenue growth 5Y4.99%
Sales Q2Q%-7.66%
3.2 Future
The Earnings Per Share is expected to grow by 8.77% on average over the next years. This is quite good.
The Revenue is expected to grow by 3.27% on average over the next years.
EPS Next Y1.98%
EPS Next 2Y6.7%
EPS Next 3Y7.06%
EPS Next 5Y8.77%
Revenue Next Year-0.59%
Revenue Next 2Y2.12%
Revenue Next 3Y2.71%
Revenue Next 5Y3.27%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
AOS is valuated rather expensively with a Price/Earnings ratio of 17.82.
AOS's Price/Earnings is on the same level as the industry average.
AOS's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 29.98.
The Price/Forward Earnings ratio is 17.48, which indicates a rather expensive current valuation of AOS.
AOS's Price/Forward Earnings is on the same level as the industry average.
AOS's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.66.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.82 | ||
| Fwd PE | 17.48 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AOS is valued a bit cheaper than the industry average as 70.00% of the companies are valued more expensively.
65.00% 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 | 16.57 | ||
| EV/EBITDA | 9.61 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
AOS has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)8.98
PEG (5Y)1.64
EPS Next 2Y6.7%
EPS Next 3Y7.06%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.06%, AOS has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.16, AOS pays a better dividend. On top of this AOS pays more dividend than 97.50% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.30, AOS has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.06% |
5.2 History
The dividend of AOS is nicely growing with an annual growth rate of 7.65%!
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.
Dividend Growth(5Y)7.65%
Div Incr Years26
Div Non Decr Years26
5.3 Sustainability
AOS pays out 35.68% of its income as dividend. This is a sustainable payout ratio.
AOS's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP35.68%
EPS Next 2Y6.7%
EPS Next 3Y7.06%
66.48
+0.54 (+0.82%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners97.78%
Inst Owner Change1.52%
Ins Owners0.62%
Ins Owner Change1.45%
Market Cap7.85B
Analysts71.58
Price Target76.4 (14.92%)
Short Float %3.87%
Short Ratio3.57
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.06% |
Yearly Dividend1.3
Dividend Growth(5Y)7.65%
DP35.68%
Div Incr Years26
Div Non Decr Years26
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-4.06%
Min EPS beat(2)-5.88%
Max EPS beat(2)-2.25%
EPS beat(4)1
Avg EPS beat(4)-2.05%
Min EPS beat(4)-5.88%
Max EPS beat(4)0.96%
EPS beat(8)5
Avg EPS beat(8)4.28%
EPS beat(12)8
Avg EPS beat(12)3.64%
EPS beat(16)12
Avg EPS beat(16)5.39%
Revenue beat(2)0
Avg Revenue beat(2)-3.26%
Min Revenue beat(2)-5.3%
Max Revenue beat(2)-1.22%
Revenue beat(4)1
Avg Revenue beat(4)-1.9%
Min Revenue beat(4)-5.3%
Max Revenue beat(4)1.62%
Revenue beat(8)3
Avg Revenue beat(8)-0.51%
Revenue beat(12)5
Avg Revenue beat(12)-0.4%
Revenue beat(16)8
Avg Revenue beat(16)0.45%
PT rev (1m)-6.48%
PT rev (3m)-9.42%
EPS NQ rev (1m)-8.22%
EPS NQ rev (3m)-8.61%
EPS NY rev (1m)-6.89%
EPS NY rev (3m)-7.37%
Revenue NQ rev (1m)-3.99%
Revenue NQ rev (3m)-3.98%
Revenue NY rev (1m)-3.73%
Revenue NY rev (3m)-3.8%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.82 | ||
| Fwd PE | 17.48 | ||
| P/S | 2.06 | ||
| P/FCF | 16.57 | ||
| P/OCF | 13.49 | ||
| P/B | 4.17 | ||
| P/tB | 9.8 | ||
| EV/EBITDA | 9.61 |
EPS(TTM)3.73
EY5.61%
EPS(NY)3.8
Fwd EY5.72%
FCF(TTM)4.01
FCFY6.04%
OCF(TTM)4.93
OCFY7.41%
SpS32.33
BVpS15.95
TBVpS6.78
PEG (NY)8.98
PEG (5Y)1.64
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.47% | ||
| ROE | 28.33% | ||
| ROCE | 30.96% | ||
| ROIC | 23.53% | ||
| ROICexc | 26.67% | ||
| ROICexgc | 56.03% | ||
| OM | 19% | ||
| PM (TTM) | 13.98% | ||
| GM | 38.14% | ||
| FCFM | 12.41% |
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 Turnover1.18
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.1 | ||
| Debt/FCF | 0.41 | ||
| Debt/EBITDA | 0.23 | ||
| Cap/Depr | 137.06% | ||
| Cap/Sales | 2.83% | ||
| Interest Coverage | 108.25 | ||
| Cash Conversion | 72.35% | ||
| Profit Quality | 88.79% | ||
| Current Ratio | 1.55 | ||
| Quick Ratio | 0.96 | ||
| Altman-Z | 7.13 |
F-Score4
WACC10.42%
ROIC/WACC2.26
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)-2.36%
EPS 3Y7.65%
EPS 5Y10.84%
EPS Q2Q%-12.37%
EPS Next Y1.98%
EPS Next 2Y6.7%
EPS Next 3Y7.06%
EPS Next 5Y8.77%
Revenue 1Y (TTM)-0.9%
Revenue growth 3Y2.56%
Revenue growth 5Y4.99%
Sales Q2Q%-7.66%
Revenue Next Year-0.59%
Revenue Next 2Y2.12%
Revenue Next 3Y2.71%
Revenue Next 5Y3.27%
EBIT growth 1Y-5.1%
EBIT growth 3Y4.81%
EBIT growth 5Y8.47%
EBIT Next Year9%
EBIT Next 3Y6.57%
EBIT Next 5Y7.65%
FCF growth 1Y-20.73%
FCF growth 3Y-5.75%
FCF growth 5Y3.87%
OCF growth 1Y-13.2%
OCF growth 3Y-3.18%
OCF growth 5Y4.98%