SMITH (A.O.) CORP (AOS)
US8318652091 - Common Stock
Overall AOS gets a fundamental rating of 7 out of 10. We evaluated AOS against 43 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 is quite expensive at the moment. It does show a decent growth rate. These ratings could make AOS a good candidate 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
With an excellent Return On Assets value of 18.14%, AOS belongs to the best of the industry, outperforming 90.70% of the companies in the same industry.
AOS has a better Return On Equity (30.68%) than 81.40% of its industry peers.
The Return On Invested Capital of AOS (25.32%) is better than 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 13.67%.
The last Return On Invested Capital (25.32%) for AOS is above the 3 year average (17.74%), which is a sign of increasing profitability.
| 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
The Profit Margin of AOS (14.94%) is better than 83.72% of its industry peers.
AOS's Profit Margin has been stable in the last couple of years.
AOS's Operating Margin of 19.85% is amongst the best of the industry. AOS outperforms 81.40% of its industry peers.
AOS's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 38.69%, AOS is doing good in the industry, outperforming 72.09% 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 | 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.
The number of shares outstanding for AOS has been reduced compared to 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
AOS has an Altman-Z score of 9.41. This indicates that AOS is financially healthy and has little risk of bankruptcy at the moment.
AOS has a better Altman-Z score (9.41) than 93.02% of its industry peers.
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.
Looking at the Debt to FCF ratio, with a value of 0.21, AOS belongs to the top of the industry, outperforming 86.05% of the companies in the same industry.
AOS has a Debt/Equity ratio of 0.06. This is a healthy value indicating a solid balance between debt and equity.
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 | 9.41 |
ROIC/WACC2.24
WACC11.29%
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 74.42% of the companies in the same industry.
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.
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 | 1.65 | ||
| 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.
Looking at the last year, AOS shows a small growth in Revenue. The Revenue has grown by 3.28% in the last year.
AOS shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.86% yearly.
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
Based on estimates for the next years, AOS will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.36% on average per year.
AOS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.74% yearly.
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
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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 21.73 indicates a rather expensive valuation of AOS.
Compared to the rest of the industry, the Price/Earnings ratio of AOS is on the same level as its industry peers.
AOS is valuated rather cheaply when we compare the Price/Earnings ratio to 28.28, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 19.29, AOS is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AOS is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.88, AOS is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.73 | ||
| Fwd PE | 19.29 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as AOS.
AOS's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.58 | ||
| EV/EBITDA | 14.34 |
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.
The excellent profitability rating of AOS may justify a higher PE ratio.
PEG (NY)3.01
PEG (5Y)2.75
EPS Next 2Y6.95%
EPS Next 3Y6.51%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.53%, AOS has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.20, AOS pays a better dividend. On top of this AOS pays more dividend than 88.37% of the companies listed in the same industry.
AOS's Dividend Yield is slightly below the S&P500 average, which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.53% |
5.2 History
On average, the dividend of AOS grows each year by 9.92%, which is quite nice.
AOS has been paying a dividend for at least 10 years, so it has 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
AOS pays out 32.12% of its income as dividend. This is a sustainable payout ratio.
The dividend of AOS is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP32.12%
EPS Next 2Y6.95%
EPS Next 3Y6.51%
SMITH (A.O.) CORP
NYSE:AOS (5/3/2024, 7:04:00 PM)
After market: 84.31 0 (0%)84.31
+0.76 (+0.91%)
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 Cap12.37B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.53% |
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 | 21.73 | ||
| Fwd PE | 19.29 | ||
| 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)3.01
PEG (5Y)2.75
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