SMITH (A.O.) CORP (AOS) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AOS - US8318652091 - Common Stock
72.46 USD
-0.63 (-0.86%)
72.46 USD
0 (0%)
Taking everything into account, AOS scores 7 out of 10 in our fundamental rating. AOS was compared to 42 industry peers in the Building Products industry. Both the health and profitability get an excellent rating, making AOS a very profitable company, without any liquidiy or solvency issues. 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 16.73%. This is amongst the best in the industry. AOS outperforms 97.62% of its industry peers.
- Looking at the Return On Equity, with a value of 28.76%, AOS belongs to the top of the industry, outperforming 85.71% of the companies in the same industry.
- AOS's Return On Invested Capital of 23.96% is amongst the best of the industry. AOS outperforms 95.24% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for AOS is significantly above the industry average of 12.68%.
- The last Return On Invested Capital (23.96%) for AOS is above the 3 year average (18.84%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.73% | ||
| ROE | 28.76% | ||
| ROIC | 23.96% |
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 13.85% is fine compared to the rest of the industry. AOS outperforms 69.05% of its industry peers.
- AOS's Profit Margin has improved in the last couple of years.
- AOS has a better Operating Margin (19.08%) than 76.19% of its industry peers.
- In the last couple of years the Operating Margin of AOS has grown nicely.
- AOS has a better Gross Margin (38.51%) than 71.43% of its industry peers.
- AOS's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.08% | ||
| PM (TTM) | 13.85% | ||
| GM | 38.51% |
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
- AOS has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
- The number of shares outstanding for AOS has been reduced compared to 1 year ago.
- Compared to 5 years ago, AOS has less shares outstanding
- Compared to 1 year ago, AOS has a worse debt to assets ratio.
2.2 Solvency
- AOS has an Altman-Z score of 8.46. This indicates that AOS is financially healthy and has little risk of bankruptcy at the moment.
- AOS has a Altman-Z score of 8.46. This is amongst the best in the industry. AOS outperforms 88.10% of its industry peers.
- The Debt to FCF ratio of AOS is 0.32, which is an excellent value as it means it would take AOS, only 0.32 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of AOS (0.32) is better than 92.86% of its industry peers.
- AOS has a Debt/Equity ratio of 0.09. This is a healthy value indicating a solid balance between debt and equity.
- AOS has a better Debt to Equity ratio (0.09) than 80.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.09 | ||
| Debt/FCF | 0.32 | ||
| Altman-Z | 8.46 |
ROIC/WACC2.63
WACC9.12%
2.3 Liquidity
- A Current Ratio of 1.54 indicates that AOS should not have too much problems paying its short term obligations.
- Looking at the Current ratio, with a value of 1.54, AOS is doing worse than 73.81% of the companies in the same industry.
- A Quick Ratio of 0.95 indicates that AOS may have some problems paying its short term obligations.
- AOS's Quick ratio of 0.95 is on the low side compared to the rest of the industry. AOS is outperformed by 73.81% 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 | 1.54 | ||
| Quick Ratio | 0.95 |
3. Growth
3.1 Past
- The earnings per share for AOS have decreased by -1.04% in the last year.
- 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 -1.64% in the past year.
- The Revenue has been growing slightly by 4.99% on average over the past years.
EPS 1Y (TTM)-1.04%
EPS 3Y7.65%
EPS 5Y10.84%
EPS Q2Q%14.63%
Revenue 1Y (TTM)-1.64%
Revenue growth 3Y2.56%
Revenue growth 5Y4.99%
Sales Q2Q%4.42%
3.2 Future
- AOS is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.61% yearly.
- The Revenue is expected to grow by 2.98% on average over the next years.
EPS Next Y2.84%
EPS Next 2Y5.9%
EPS Next 3Y6.36%
EPS Next 5Y7.61%
Revenue Next Year-0.36%
Revenue Next 2Y1.81%
Revenue Next 3Y2.49%
Revenue Next 5Y2.98%
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
- 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
- With a Price/Earnings ratio of 19.02, AOS is valued on the expensive side.
- The rest of the industry has a similar Price/Earnings ratio as AOS.
- The average S&P500 Price/Earnings ratio is at 27.21. AOS is valued slightly cheaper when compared to this.
- The Price/Forward Earnings ratio is 17.32, which indicates a rather expensive current valuation of AOS.
- AOS's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. AOS is cheaper than 69.05% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 24.26. AOS is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.02 | ||
| Fwd PE | 17.32 |
4.2 Price Multiples
- AOS's Enterprise Value to EBITDA is on the same level as the industry average.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of AOS indicates a somewhat cheap valuation: AOS is cheaper than 73.81% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.64 | ||
| EV/EBITDA | 12.51 |
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)6.69
PEG (5Y)1.76
EPS Next 2Y5.9%
EPS Next 3Y6.36%
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 0.67. AOS pays more dividend than 95.24% of the companies in the same industry.
- AOS's Dividend Yield is comparable with the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2% |
5.2 History
- On average, the dividend of AOS grows each year by 7.65%, which is quite nice.
- 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
- 36.68% 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.
DP36.68%
EPS Next 2Y5.9%
EPS Next 3Y6.36%
SMITH (A.O.) CORP / AOS FAQ
Can you provide the ChartMill fundamental rating for SMITH (A.O.) CORP?
ChartMill assigns a fundamental rating of 7 / 10 to AOS.
Can you provide the valuation status for SMITH (A.O.) CORP?
ChartMill assigns a valuation rating of 4 / 10 to SMITH (A.O.) CORP (AOS). This can be considered as Fairly Valued.
Can you provide the profitability details for SMITH (A.O.) CORP?
SMITH (A.O.) CORP (AOS) has a profitability rating of 9 / 10.
What is the valuation of SMITH (A.O.) CORP based on its PE and PB ratios?
The Price/Earnings (PE) ratio for SMITH (A.O.) CORP (AOS) is 19.02 and the Price/Book (PB) ratio is 5.47.
Can you provide the financial health for AOS stock?
The financial health rating of SMITH (A.O.) CORP (AOS) is 8 / 10.