SMITH (A.O.) CORP (AOS) Stock Fundamental Analysis
USA - NYSE:AOS - US8318652091 - Common Stock
72.57 USD
-1.73 (-2.33%)
73.28 USD
+0.71 (+0.98%)
We assign a fundamental rating of 7 out of 10 to AOS. AOS was compared to 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 is valued correctly, but it does not seem to be growing. Finally AOS also has an excellent dividend rating. This makes AOS very considerable 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.
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
The Return On Assets of AOS (15.97%) is better than 97.56% of its industry peers.
AOS has a better Return On Equity (28.09%) than 85.37% of its industry peers.
The Return On Invested Capital of AOS (22.56%) is better than 95.12% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for AOS is significantly above the industry average of 12.76%.
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
The Profit Margin of AOS (13.68%) is better than 70.73% of its industry peers.
In the last couple of years the Profit Margin of AOS has grown nicely.
With a decent Operating Margin value of 18.82%, AOS is doing good in the industry, outperforming 75.61% of the companies in the same industry.
In the last couple of years the Operating Margin of AOS has grown nicely.
The Gross Margin of AOS (38.20%) is better than 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
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
AOS has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 8.09 indicates that AOS is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 8.09, AOS belongs to the top of the industry, outperforming 92.68% of the companies in the same industry.
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.
AOS has a Debt to FCF ratio of 0.61. This is amongst the best in the industry. AOS outperforms 92.68% of its industry peers.
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 73.17% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.15 | ||
| Debt/FCF | 0.61 | ||
| Altman-Z | 8.09 |
ROIC/WACC2.19
WACC10.28%
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's Current ratio of 1.65 is on the low side compared to the rest of the industry. AOS is outperformed by 65.85% of its industry peers.
A Quick Ratio of 1.03 indicates that AOS should not have too much problems paying its short term obligations.
AOS has a Quick ratio of 1.03. This is in the lower half of the industry: AOS underperforms 68.29% of its industry peers.
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 | 1.03 |
3. Growth
3.1 Past
The earnings per share for AOS have decreased by -6.11% 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 -3.53% in the past year.
AOS shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.99% yearly.
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
The Earnings Per Share is expected to grow by 7.77% on average over the next years.
Based on estimates for the next years, AOS will show a small growth in Revenue. The Revenue will grow by 3.98% on average per year.
EPS Next Y3.54%
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
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 19.67, which indicates a rather expensive current valuation of AOS.
Based on the Price/Earnings ratio, AOS is valued a bit cheaper than 63.41% of the companies in the same industry.
AOS's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.30.
AOS is valuated rather expensively with a Price/Forward Earnings ratio of 17.09.
Based on the Price/Forward Earnings ratio, AOS is valued a bit cheaper than the industry average as 63.41% of the companies are valued more expensively.
AOS is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.73, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.67 | ||
| Fwd PE | 17.09 |
4.2 Price Multiples
AOS's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, AOS is valued a bit cheaper than 68.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.56 | ||
| EV/EBITDA | 12.96 |
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)5.56
PEG (5Y)1.81
EPS Next 2Y6.7%
EPS Next 3Y6.79%
5. Dividend
5.1 Amount
AOS has a Yearly Dividend Yield of 1.83%.
Compared to an average industry Dividend Yield of 1.13, AOS pays a better dividend. On top of this AOS pays more dividend than 95.12% of the companies listed in the same industry.
AOS's Dividend Yield is slightly below the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.83% |
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
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%
72.57
-1.73 (-2.33%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners99.99%
Inst Owner Change-2.73%
Ins Owners0.39%
Ins Owner Change-0.58%
Market Cap10.17B
Analysts71
Price Target81.52 (12.33%)
Short Float %2.4%
Short Ratio1.98
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.83% |
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)6.42%
EPS NQ rev (1m)0.17%
EPS NQ rev (3m)-1.55%
EPS NY rev (1m)1.21%
EPS NY rev (3m)1.29%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.63%
Revenue NY rev (1m)0.13%
Revenue NY rev (3m)0.59%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.67 | ||
| Fwd PE | 17.09 | ||
| P/S | 2.68 | ||
| P/FCF | 20.56 | ||
| P/OCF | 17.06 | ||
| P/B | 5.51 | ||
| P/tB | 13.38 | ||
| EV/EBITDA | 12.96 |
EPS(TTM)3.69
EY5.08%
EPS(NY)4.25
Fwd EY5.85%
FCF(TTM)3.53
FCFY4.86%
OCF(TTM)4.25
OCFY5.86%
SpS27.05
BVpS13.17
TBVpS5.43
PEG (NY)5.56
PEG (5Y)1.81
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 | 8.09 |
F-Score4
WACC10.28%
ROIC/WACC2.19
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 Y3.54%
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 Year10.26%
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%