SMITH (A.O.) CORP (AOS) Stock Fundamental Analysis
USA - NYSE:AOS - US8318652091 - Common Stock
69.71 USD
+0.35 (+0.5%)
69.71 USD
0 (0%)
Overall AOS gets a fundamental rating of 7 out of 10. We evaluated AOS against 41 industry peers in the Building Products industry. AOS scores excellent points on both the profitability and health parts. This is a solid base for a good stock. AOS has a valuation in line with the averages, but on the other hand it scores bad on growth. AOS also has an excellent dividend rating. This makes AOS very considerable for dividend investing!
1. Profitability
1.1 Basic Checks
AOS had positive earnings in the past year.
In the past year AOS had a positive cash flow from operations.
Each year in the past 5 years AOS has 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 15.97%. This is amongst the best in the industry. AOS outperforms 97.56% of its industry peers.
Looking at the Return On Equity, with a value of 28.09%, AOS belongs to the top of the industry, outperforming 85.37% of the companies in the same industry.
AOS has a Return On Invested Capital of 22.56%. This is amongst the best in the industry. AOS outperforms 92.68% 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 12.70%.
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
AOS has a better Profit Margin (13.68%) than 70.73% of its industry peers.
AOS's Profit Margin has improved in the last couple of years.
AOS has a better Operating Margin (18.82%) than 75.61% of its industry peers.
AOS's Operating Margin has improved in the last couple of years.
AOS's Gross Margin of 38.20% is fine compared to the rest of the industry. AOS outperforms 70.73% of its industry peers.
AOS's Gross Margin has been stable in the last couple of years.
| 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so AOS is creating value.
The number of shares outstanding for AOS has been reduced compared to 1 year ago.
AOS has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, AOS has a worse debt to assets ratio.
2.2 Solvency
AOS has an Altman-Z score of 7.91. This indicates that AOS is financially healthy and has little risk of bankruptcy at the moment.
AOS has a better Altman-Z score (7.91) than 90.24% of its industry peers.
AOS has a debt to FCF ratio of 0.61. This is a very positive value and a sign of high solvency as it would only need 0.61 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 0.61, AOS belongs to the best 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.
With a decent Debt to Equity ratio value of 0.15, AOS is doing good in the industry, outperforming 78.05% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.15 | ||
| Debt/FCF | 0.61 | ||
| Altman-Z | 7.91 |
ROIC/WACC2.31
WACC9.75%
2.3 Liquidity
A Current Ratio of 1.65 indicates that AOS should not have too much problems paying 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.
Looking at the Quick ratio, with a value of 1.03, AOS is doing worse than 68.29% of the companies in the same industry.
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%.
The Earnings Per Share has been growing by 10.84% on average over the past years. This is quite good.
Looking at the last year, AOS shows a decrease in Revenue. The Revenue has decreased by -3.53% in the last 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)-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
Based on estimates for the next years, AOS will show a small growth in Earnings Per Share. The EPS will grow by 7.77% on average per year.
AOS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.98% yearly.
EPS Next Y3.59%
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 18.89 indicates a rather expensive valuation of AOS.
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 27.42.
The Price/Forward Earnings ratio is 16.41, which indicates a correct valuation of AOS.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AOS is on the same level as its industry peers.
AOS is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.94, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.89 | ||
| Fwd PE | 16.41 |
4.2 Price Multiples
AOS's Enterprise Value to EBITDA ratio is in line with the industry average.
AOS's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. AOS is cheaper than 68.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.75 | ||
| EV/EBITDA | 12.46 |
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)5.26
PEG (5Y)1.74
EPS Next 2Y6.7%
EPS Next 3Y6.79%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.08%, AOS has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.25, AOS pays a better dividend. On top of this AOS pays more dividend than 92.68% of the companies listed in the same industry.
AOS's Dividend Yield is comparable with the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.08% |
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 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
37.35% of the earnings are spent on dividend by AOS. This is a low number and 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%
69.71
+0.35 (+0.5%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners98.8%
Inst Owner Change0.21%
Ins Owners0.37%
Ins Owner Change-1.75%
Market Cap9.77B
Analysts71
Price Target81.52 (16.94%)
Short Float %2.38%
Short Ratio2.25
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.08% |
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)0%
PT rev (3m)5.52%
EPS NQ rev (1m)-0.09%
EPS NQ rev (3m)-1.23%
EPS NY rev (1m)0.05%
EPS NY rev (3m)1.26%
Revenue NQ rev (1m)-0.02%
Revenue NQ rev (3m)0.84%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.89 | ||
| Fwd PE | 16.41 | ||
| P/S | 2.58 | ||
| P/FCF | 19.75 | ||
| P/OCF | 16.39 | ||
| P/B | 5.29 | ||
| P/tB | 12.85 | ||
| EV/EBITDA | 12.46 |
EPS(TTM)3.69
EY5.29%
EPS(NY)4.25
Fwd EY6.09%
FCF(TTM)3.53
FCFY5.06%
OCF(TTM)4.25
OCFY6.1%
SpS27.05
BVpS13.17
TBVpS5.43
PEG (NY)5.26
PEG (5Y)1.74
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 | 7.91 |
F-Score4
WACC9.75%
ROIC/WACC2.31
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 Y3.59%
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 Year10.36%
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%