SMITH (A.O.) CORP (AOS) Stock Fundamental Analysis
NYSE:AOS - New York Stock Exchange, Inc. - US8318652091 - Common Stock - Currency: USD
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 has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. AOS has a valuation in line with the averages, but it does not seem to be growing. 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.
Each year in the past 5 years AOS had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 15.99%, AOS belongs to the top of the industry, outperforming 90.24% of the companies in the same industry.
AOS's Return On Equity of 28.17% is amongst the best of the industry. AOS outperforms 82.93% of its industry peers.
Looking at the Return On Invested Capital, with a value of 22.80%, AOS belongs to the top of the industry, outperforming 95.12% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for AOS is significantly above the industry average of 12.62%.
The 3 year average ROIC (18.84%) for AOS is below the current ROIC(22.80%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.99% | ||
| ROE | 28.17% | ||
| ROIC | 22.8% |
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 has a better Profit Margin (13.74%) than 75.61% of its industry peers.
AOS's Profit Margin has improved in the last couple of years.
AOS has a Operating Margin of 18.82%. This is in the better half of the industry: AOS outperforms 75.61% 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 38.04%, AOS is in the better half of the industry, outperforming 68.29% of the companies in the same industry.
AOS's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.82% | ||
| PM (TTM) | 13.74% | ||
| GM | 38.04% |
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), AOS is creating value.
AOS has less shares outstanding than it did 1 year ago.
AOS has less shares outstanding than it did 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 7.76. This indicates that AOS is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 7.76, AOS belongs to the best of the industry, outperforming 87.80% of the companies in the same industry.
The Debt to FCF ratio of AOS is 0.66, which is an excellent value as it means it would take AOS, only 0.66 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 0.66, AOS belongs to the best of the industry, outperforming 90.24% of the companies in the same industry.
AOS has a Debt/Equity ratio of 0.14. This is a healthy value indicating a solid balance between debt and equity.
With a decent Debt to Equity ratio value of 0.14, AOS is doing good in the industry, outperforming 78.05% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 0.66 | ||
| Altman-Z | 7.76 |
ROIC/WACC2.24
WACC10.16%
2.3 Liquidity
AOS has a Current Ratio of 1.61. This is a normal value and indicates that AOS is financially healthy and should not expect problems in meeting its short term obligations.
AOS's Current ratio of 1.61 is on the low side compared to the rest of the industry. AOS is outperformed by 68.29% of its industry peers.
AOS has a Quick Ratio of 1.01. 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 Quick ratio, with a value of 1.01, AOS is doing worse than 73.17% of the companies in the same industry.
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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.61 | ||
| Quick Ratio | 1.01 |
3. Growth
3.1 Past
AOS shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -5.15%.
AOS shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.84% yearly.
Looking at the last year, AOS shows a decrease in Revenue. The Revenue has decreased by -1.60% in the last year.
The Revenue has been growing slightly by 4.99% on average over the past years.
EPS 1Y (TTM)-5.15%
EPS 3Y7.65%
EPS 5Y10.84%
EPS Q2Q%-5%
Revenue 1Y (TTM)-1.6%
Revenue growth 3Y2.56%
Revenue growth 5Y4.99%
Sales Q2Q%-1.52%
3.2 Future
The Earnings Per Share is expected to grow by 7.97% on average over the next years.
The Revenue is expected to grow by 4.65% on average over the next years.
EPS Next Y2.21%
EPS Next 2Y6.4%
EPS Next 3Y6.69%
EPS Next 5Y7.97%
Revenue Next Year0.13%
Revenue Next 2Y2.21%
Revenue Next 3Y2.79%
Revenue Next 5Y4.65%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less 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 stable.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 18.46, which indicates a rather expensive current valuation of AOS.
Based on the Price/Earnings ratio, AOS is valued a bit cheaper than the industry average as 63.41% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.45. AOS is valued slightly cheaper when compared to this.
AOS is valuated correctly with a Price/Forward Earnings ratio of 16.08.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AOS indicates a somewhat cheap valuation: AOS is cheaper than 63.41% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.90. AOS is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.46 | ||
| Fwd PE | 16.08 |
4.2 Price Multiples
AOS's Enterprise Value to EBITDA is on the same level as the industry average.
AOS's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.74 | ||
| EV/EBITDA | 12.19 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of AOS may justify a higher PE ratio.
PEG (NY)8.37
PEG (5Y)1.7
EPS Next 2Y6.4%
EPS Next 3Y6.69%
5. Dividend
5.1 Amount
AOS has a Yearly Dividend Yield of 2.00%. 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 1.16. AOS pays more dividend than 97.56% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, AOS has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2% |
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
36.80% of the earnings are spent on dividend by AOS. This is a low number and 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.
DP36.8%
EPS Next 2Y6.4%
EPS Next 3Y6.69%
67.92
-0.17 (-0.25%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners99.56%
Inst Owner Change1.26%
Ins Owners0.38%
Ins Owner Change2.72%
Market Cap9.65B
Analysts71.58
Price Target76.6 (12.78%)
Short Float %3.44%
Short Ratio2.31
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2% |
Yearly Dividend1.3
Dividend Growth(5Y)7.65%
DP36.8%
Div Incr Years26
Div Non Decr Years26
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.3%
Min EPS beat(2)-5.88%
Max EPS beat(2)3.28%
EPS beat(4)1
Avg EPS beat(4)-1.47%
Min EPS beat(4)-5.88%
Max EPS beat(4)3.28%
EPS beat(8)5
Avg EPS beat(8)2.21%
EPS beat(12)8
Avg EPS beat(12)3.74%
EPS beat(16)12
Avg EPS beat(16)5.33%
Revenue beat(2)1
Avg Revenue beat(2)-2.63%
Min Revenue beat(2)-5.3%
Max Revenue beat(2)0.03%
Revenue beat(4)2
Avg Revenue beat(4)-1.22%
Min Revenue beat(4)-5.3%
Max Revenue beat(4)1.62%
Revenue beat(8)3
Avg Revenue beat(8)-0.97%
Revenue beat(12)5
Avg Revenue beat(12)-0.4%
Revenue beat(16)9
Avg Revenue beat(16)0.51%
PT rev (1m)0%
PT rev (3m)-0.84%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.87%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)0.22%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.95%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.7%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.46 | ||
| Fwd PE | 16.08 | ||
| P/S | 2.54 | ||
| P/FCF | 23.74 | ||
| P/OCF | 18.78 | ||
| P/B | 5.2 | ||
| P/tB | 12.47 | ||
| EV/EBITDA | 12.19 |
EPS(TTM)3.68
EY5.42%
EPS(NY)4.22
Fwd EY6.22%
FCF(TTM)2.86
FCFY4.21%
OCF(TTM)3.62
OCFY5.32%
SpS26.76
BVpS13.05
TBVpS5.45
PEG (NY)8.37
PEG (5Y)1.7
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.99% | ||
| ROE | 28.17% | ||
| ROCE | 30% | ||
| ROIC | 22.8% | ||
| ROICexc | 24.89% | ||
| ROICexgc | 49.25% | ||
| OM | 18.82% | ||
| PM (TTM) | 13.74% | ||
| GM | 38.04% | ||
| FCFM | 10.69% |
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-Score3
Asset Turnover1.16
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 0.66 | ||
| Debt/EBITDA | 0.33 | ||
| Cap/Depr | 134.29% | ||
| Cap/Sales | 2.82% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 64.6% | ||
| Profit Quality | 77.8% | ||
| Current Ratio | 1.61 | ||
| Quick Ratio | 1.01 | ||
| Altman-Z | 7.76 |
F-Score3
WACC10.16%
ROIC/WACC2.24
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)-5.15%
EPS 3Y7.65%
EPS 5Y10.84%
EPS Q2Q%-5%
EPS Next Y2.21%
EPS Next 2Y6.4%
EPS Next 3Y6.69%
EPS Next 5Y7.97%
Revenue 1Y (TTM)-1.6%
Revenue growth 3Y2.56%
Revenue growth 5Y4.99%
Sales Q2Q%-1.52%
Revenue Next Year0.13%
Revenue Next 2Y2.21%
Revenue Next 3Y2.79%
Revenue Next 5Y4.65%
EBIT growth 1Y-6.71%
EBIT growth 3Y4.81%
EBIT growth 5Y8.47%
EBIT Next Year7.96%
EBIT Next 3Y6.65%
EBIT Next 5Y6.28%
FCF growth 1Y-4.71%
FCF growth 3Y-5.75%
FCF growth 5Y3.87%
OCF growth 1Y3.86%
OCF growth 3Y-3.18%
OCF growth 5Y4.98%