SMITH (A.O.) CORP (AOS) Stock Fundamental Analysis
NYSE:AOS - New York Stock Exchange, Inc. - US8318652091 - Common Stock - Currency: USD
Taking everything into account, AOS scores 6 out of 10 in our fundamental rating. AOS was compared to 41 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 has a valuation in line with the averages, but on the other hand it scores bad on growth. Finally AOS also has an excellent dividend rating. With these ratings, AOS could be worth investigating further for dividend 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 16.47%. This is amongst the best in the industry. AOS outperforms 92.68% of its industry peers.
AOS's Return On Equity of 28.33% is amongst the best of the industry. AOS outperforms 80.49% of its industry peers.
AOS has a better Return On Invested Capital (23.53%) than 95.12% 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 13.22%.
The last Return On Invested Capital (23.53%) for AOS is above the 3 year average (18.84%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.47% | ||
| ROE | 28.33% | ||
| ROIC | 23.53% |
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 13.98% is fine compared to the rest of the industry. AOS outperforms 73.17% of its industry peers.
AOS's Profit Margin has improved in the last couple of years.
The Operating Margin of AOS (19.00%) is better than 75.61% of its industry peers.
In the last couple of years the Operating Margin of AOS has grown nicely.
AOS has a Gross Margin of 38.14%. This is in the better half 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 | 19% | ||
| PM (TTM) | 13.98% | ||
| GM | 38.14% |
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.
AOS has less shares outstanding than it did 1 year ago.
AOS has less shares outstanding than it did 5 years ago.
AOS has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 7.14 indicates that AOS is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 7.14, AOS belongs to the top of the industry, outperforming 82.93% of the companies in the same industry.
The Debt to FCF ratio of AOS is 0.41, which is an excellent value as it means it would take AOS, only 0.41 years of fcf income to pay off all of its debts.
AOS has a better Debt to FCF ratio (0.41) than 87.80% of its industry peers.
A Debt/Equity ratio of 0.10 indicates that AOS is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.10, AOS is in the better half of the industry, outperforming 75.61% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.1 | ||
| Debt/FCF | 0.41 | ||
| Altman-Z | 7.14 |
ROIC/WACC2.3
WACC10.21%
2.3 Liquidity
A Current Ratio of 1.55 indicates that AOS should not have too much problems paying its short term obligations.
With a Current ratio value of 1.55, AOS is not doing good in the industry: 70.73% of the companies in the same industry are doing better.
A Quick Ratio of 0.96 indicates that AOS may have some problems paying its short term obligations.
AOS has a worse Quick ratio (0.96) than 73.17% 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 | 1.55 | ||
| Quick Ratio | 0.96 |
3. Growth
3.1 Past
The earnings per share for AOS have decreased by -5.15% in the last year.
Measured over the past years, AOS shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.84% on average per year.
AOS shows a decrease in Revenue. In the last year, the revenue decreased by -0.90%.
The Revenue has been growing slightly by 4.99% on average over the past years.
EPS 1Y (TTM)-5.15%
EPS 3Y7.65%
EPS 5Y10.84%
EPS Q2Q%-5%
Revenue 1Y (TTM)-0.9%
Revenue growth 3Y2.56%
Revenue growth 5Y4.99%
Sales Q2Q%-1.52%
3.2 Future
The Earnings Per Share is expected to grow by 8.53% on average over the next years. This is quite good.
AOS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.15% yearly.
EPS Next Y1.3%
EPS Next 2Y6.28%
EPS Next 3Y6.51%
EPS Next 5Y8.53%
Revenue Next Year-0.64%
Revenue Next 2Y2.06%
Revenue Next 3Y2.78%
Revenue Next 5Y5.15%
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 stable.
4. Valuation
4.1 Price/Earnings Ratio
AOS is valuated rather expensively with a Price/Earnings ratio of 18.44.
The rest of the industry has a similar Price/Earnings ratio as AOS.
Compared to an average S&P500 Price/Earnings ratio of 28.88, AOS is valued a bit cheaper.
AOS is valuated correctly with a Price/Forward Earnings ratio of 16.11.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AOS is on the same level as its industry peers.
The average S&P500 Price/Forward Earnings ratio is at 21.20. AOS is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.44 | ||
| Fwd PE | 16.11 |
4.2 Price Multiples
65.85% of the companies in the same industry are more expensive than AOS, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, AOS is valued a bit cheaper than 63.41% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.85 | ||
| EV/EBITDA | 9.66 |
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)14.23
PEG (5Y)1.7
EPS Next 2Y6.28%
EPS Next 3Y6.51%
5. Dividend
5.1 Amount
AOS has a Yearly Dividend Yield of 2.10%.
AOS's Dividend Yield is rather good when compared to the industry average which is at 1.25. AOS pays more dividend than 97.56% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.45, AOS has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.1% |
5.2 History
On average, the dividend of AOS grows each year by 7.65%, 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 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
AOS pays out 35.68% of its income as dividend. This is a sustainable payout ratio.
AOS's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP35.68%
EPS Next 2Y6.28%
EPS Next 3Y6.51%
67.86
+0.84 (+1.25%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners97.78%
Inst Owner Change0.74%
Ins Owners0.62%
Ins Owner Change2.59%
Market Cap7.98B
Analysts71.58
Price Target75.49 (11.24%)
Short Float %4.58%
Short Ratio3.55
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.1% |
Yearly Dividend1.3
Dividend Growth(5Y)7.65%
DP35.68%
Div Incr Years26
Div Non Decr Years26
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-4.06%
Min EPS beat(2)-5.88%
Max EPS beat(2)-2.25%
EPS beat(4)1
Avg EPS beat(4)-2.05%
Min EPS beat(4)-5.88%
Max EPS beat(4)0.96%
EPS beat(8)5
Avg EPS beat(8)4.28%
EPS beat(12)8
Avg EPS beat(12)3.64%
EPS beat(16)12
Avg EPS beat(16)5.39%
Revenue beat(2)0
Avg Revenue beat(2)-3.26%
Min Revenue beat(2)-5.3%
Max Revenue beat(2)-1.22%
Revenue beat(4)1
Avg Revenue beat(4)-1.9%
Min Revenue beat(4)-5.3%
Max Revenue beat(4)1.62%
Revenue beat(8)3
Avg Revenue beat(8)-0.51%
Revenue beat(12)5
Avg Revenue beat(12)-0.4%
Revenue beat(16)8
Avg Revenue beat(16)0.45%
PT rev (1m)-2.28%
PT rev (3m)-8.61%
EPS NQ rev (1m)0.37%
EPS NQ rev (3m)-8.27%
EPS NY rev (1m)-0.68%
EPS NY rev (3m)-7.93%
Revenue NQ rev (1m)0.36%
Revenue NQ rev (3m)-3.64%
Revenue NY rev (1m)-0.08%
Revenue NY rev (3m)-3.78%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.44 | ||
| Fwd PE | 16.11 | ||
| P/S | 2.09 | ||
| P/FCF | 16.85 | ||
| P/OCF | 13.72 | ||
| P/B | 4.24 | ||
| P/tB | 9.97 | ||
| EV/EBITDA | 9.66 |
EPS(TTM)3.68
EY5.42%
EPS(NY)4.21
Fwd EY6.21%
FCF(TTM)4.03
FCFY5.93%
OCF(TTM)4.94
OCFY7.29%
SpS32.45
BVpS16.01
TBVpS6.81
PEG (NY)14.23
PEG (5Y)1.7
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.47% | ||
| ROE | 28.33% | ||
| ROCE | 30.96% | ||
| ROIC | 23.53% | ||
| ROICexc | 26.67% | ||
| ROICexgc | 56.03% | ||
| OM | 19% | ||
| PM (TTM) | 13.98% | ||
| GM | 38.14% | ||
| FCFM | 12.41% |
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 Turnover1.18
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.1 | ||
| Debt/FCF | 0.41 | ||
| Debt/EBITDA | 0.23 | ||
| Cap/Depr | 137.06% | ||
| Cap/Sales | 2.83% | ||
| Interest Coverage | 108.25 | ||
| Cash Conversion | 72.35% | ||
| Profit Quality | 88.79% | ||
| Current Ratio | 1.55 | ||
| Quick Ratio | 0.96 | ||
| Altman-Z | 7.14 |
F-Score4
WACC10.21%
ROIC/WACC2.3
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)-5.15%
EPS 3Y7.65%
EPS 5Y10.84%
EPS Q2Q%-5%
EPS Next Y1.3%
EPS Next 2Y6.28%
EPS Next 3Y6.51%
EPS Next 5Y8.53%
Revenue 1Y (TTM)-0.9%
Revenue growth 3Y2.56%
Revenue growth 5Y4.99%
Sales Q2Q%-1.52%
Revenue Next Year-0.64%
Revenue Next 2Y2.06%
Revenue Next 3Y2.78%
Revenue Next 5Y5.15%
EBIT growth 1Y-5.1%
EBIT growth 3Y4.81%
EBIT growth 5Y8.47%
EBIT Next Year8.16%
EBIT Next 3Y6.99%
EBIT Next 5Y6.86%
FCF growth 1Y-20.73%
FCF growth 3Y-5.75%
FCF growth 5Y3.87%
OCF growth 1Y-13.2%
OCF growth 3Y-3.18%
OCF growth 5Y4.98%