SMITH (A.O.) CORP (AOS)
US8318652091 - Common Stock
AOS gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 43 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 quite expensive at the moment. It does show a decent growth rate. With these ratings, AOS could be worth investigating further for quality investing!.
1. Profitability
1.1 Basic Checks
In the past year AOS was profitable.
In the past year AOS had a positive cash flow from operations.
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
AOS has a Return On Assets of 18.14%. This is amongst the best in the industry. AOS outperforms 93.02% of its industry peers.
Looking at the Return On Equity, with a value of 30.68%, AOS belongs to the top of the industry, outperforming 81.40% of the companies in the same industry.
AOS has a Return On Invested Capital of 25.32%. This is amongst the best in the industry. AOS outperforms 95.35% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for AOS is above the industry average of 13.42%.
The 3 year average ROIC (17.74%) for AOS is below the current ROIC(25.32%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.14% | ||
| ROE | 30.68% | ||
| ROIC | 25.32% |
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
Looking at the Profit Margin, with a value of 14.94%, AOS belongs to the top of the industry, outperforming 83.72% of the companies in the same industry.
AOS's Profit Margin has been stable in the last couple of years.
AOS has a Operating Margin of 19.85%. This is in the better half of the industry: AOS outperforms 79.07% of its industry peers.
In the last couple of years the Operating Margin of AOS has grown nicely.
AOS has a Gross Margin of 38.69%. This is in the better half of the industry: AOS outperforms 72.09% 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 | 19.85% | ||
| PM (TTM) | 14.94% | ||
| GM | 38.69% |
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.
AOS has less shares outstanding than it did 1 year ago.
The number of shares outstanding for AOS has been reduced compared to 5 years ago.
Compared to 1 year ago, AOS has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 9.50 indicates that AOS is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 9.50, AOS belongs to the best of the industry, outperforming 93.02% of the companies in the same industry.
AOS has a debt to FCF ratio of 0.21. This is a very positive value and a sign of high solvency as it would only need 0.21 years to pay back of all of its debts.
AOS has a Debt to FCF ratio of 0.21. This is amongst the best in the industry. AOS outperforms 86.05% of its industry peers.
A Debt/Equity ratio of 0.06 indicates that AOS is not too dependend on debt financing.
AOS has a Debt to Equity ratio of 0.06. This is in the better half of the industry: AOS outperforms 79.07% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.21 | ||
| Altman-Z | 9.5 |
ROIC/WACC2.19
WACC11.57%
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.
AOS has a worse Current ratio (1.65) than 72.09% of its industry peers.
AOS has a Quick Ratio of 1.06. This is a normal value and indicates that AOS is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.06, AOS is not doing good in the industry: 74.42% of the companies in the same industry are doing better.
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 | 1.06 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 17.22% over the past year.
The Earnings Per Share has been growing slightly by 7.92% on average over the past years.
AOS shows a small growth in Revenue. In the last year, the Revenue has grown by 3.28%.
Measured over the past years, AOS shows a small growth in Revenue. The Revenue has been growing by 3.86% on average per year.
EPS 1Y (TTM)17.22%
EPS 3Y20.74%
EPS 5Y7.92%
EPS growth Q2Q6.38%
Revenue 1Y (TTM)3.28%
Revenue growth 3Y9.99%
Revenue growth 5Y3.86%
Revenue growth Q2Q1.28%
3.2 Future
AOS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.36% yearly.
The Revenue is expected to grow by 5.74% on average over the next years.
EPS Next Y7.23%
EPS Next 2Y6.95%
EPS Next 3Y6.51%
EPS Next 5Y8.36%
Revenue Next Year4.17%
Revenue Next 2Y4.07%
Revenue Next 3Y4.22%
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
With a Price/Earnings ratio of 22.08, AOS is valued on the expensive side.
AOS's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 28.60, AOS is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 19.61, the valuation of AOS can be described as rather expensive.
AOS's Price/Forward Earnings ratio is in line with the industry average.
AOS is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 20.15, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.08 | ||
| Fwd PE | 19.61 |
4.2 Price Multiples
AOS's Enterprise Value to EBITDA ratio is in line with the industry average.
AOS's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.93 | ||
| EV/EBITDA | 14.58 |
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)3.05
PEG (5Y)2.79
EPS Next 2Y6.95%
EPS Next 3Y6.51%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.50%, 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 1.17. AOS pays more dividend than 88.37% of the companies in the same industry.
AOS's Dividend Yield is slightly below the S&P500 average, which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.5% |
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 Years12
Div Non Decr Years12
5.3 Sustainability
32.12% of the earnings are spent on dividend by AOS. This is a low number and sustainable payout ratio.
AOS's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP32.12%
EPS Next 2Y6.95%
EPS Next 3Y6.51%
SMITH (A.O.) CORP
NYSE:AOS (5/17/2024, 7:04:00 PM)
After market: 85.68 0 (0%)85.68
+0.32 (+0.37%)
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 Cap12.57B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.5% |
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)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
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 | 22.08 | ||
| Fwd PE | 19.61 | ||
| 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)3.05
PEG (5Y)2.79
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.14% | ||
| ROE | 30.68% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 19.85% | ||
| PM (TTM) | 14.94% | ||
| GM | 38.69% | ||
| 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 Turnover1.21
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 | 1.65 | ||
| Quick Ratio | 1.06 | ||
| 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)
Growth
EPS 1Y (TTM)17.22%
EPS 3Y20.74%
EPS 5Y
EPS growth Q2Q
EPS Next Y7.23%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)3.28%
Revenue growth 3Y9.99%
Revenue growth 5Y
Revenue growth 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