SMITH (A.O.) CORP (AOS) Stock Fundamental Analysis
NYSE:AOS - US8318652091 - Common Stock
73.61 USD
+1.86 (+2.59%)
73.61 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. Both the health and profitability get an excellent rating, making AOS a very profitable company, without any liquidiy or solvency issues. 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
AOS had positive earnings in the past year.
AOS had a positive operating cash flow in the past year.
Each year in the past 5 years AOS has been profitable.
AOS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 15.97%, AOS belongs to the top of the industry, outperforming 97.56% of the companies in the same industry.
AOS has a better Return On Equity (28.09%) than 85.37% of its industry peers.
AOS has a better Return On Invested Capital (22.56%) 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 12.73%.
The 3 year average ROIC (18.84%) for AOS is below the current ROIC(22.56%), indicating increased profibility in the last year.
| 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 Profit Margin of 13.68%. This is in the better half of the industry: AOS outperforms 70.73% of its industry peers.
In the last couple of years the Profit Margin of AOS has grown nicely.
AOS has a Operating Margin of 18.82%. This is in the better half of the industry: AOS outperforms 75.61% of its industry peers.
AOS's Operating Margin has improved in the last couple of years.
The Gross Margin of AOS (38.20%) is better than 70.73% of its industry peers.
In the last couple of years the Gross Margin of AOS has remained more or less at the same level.
| 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.
Compared to 1 year ago, AOS has less shares outstanding
The number of shares outstanding for AOS has been reduced compared to 5 years ago.
The debt/assets ratio for AOS is higher compared to a year ago.
2.2 Solvency
AOS has an Altman-Z score of 8.15. This indicates that AOS is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 8.15, AOS belongs to the best of the industry, outperforming 90.24% of the companies in the same industry.
The Debt to FCF ratio of AOS is 0.61, which is an excellent value as it means it would take AOS, only 0.61 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.61, AOS belongs to the top 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.
Looking at the Debt to Equity ratio, with a value of 0.15, AOS is in the better half of 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 | 8.15 |
ROIC/WACC2.16
WACC10.45%
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 has a worse Current ratio (1.65) than 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 worse Quick ratio (1.03) than 68.29% 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 | 1.65 | ||
| Quick Ratio | 1.03 |
3. Growth
3.1 Past
The earnings per share for AOS have decreased by -6.11% in the last year.
The Earnings Per Share has been growing by 10.84% on average over the past years. This is quite good.
AOS shows a decrease in Revenue. In the last year, the revenue decreased by -3.53%.
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
The Earnings Per Share is expected to grow by 7.77% on average over the next years.
AOS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.98% yearly.
EPS Next Y3.54%
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
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
With a Price/Earnings ratio of 19.95, AOS is valued on the expensive side.
AOS's Price/Earnings ratio is a bit cheaper when compared to the industry. AOS is cheaper than 63.41% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.24. AOS is valued slightly cheaper when compared to this.
AOS is valuated rather expensively with a Price/Forward Earnings ratio of 17.34.
AOS's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. AOS is cheaper than 63.41% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.81. AOS is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.95 | ||
| Fwd PE | 17.34 |
4.2 Price Multiples
AOS's Enterprise Value to EBITDA ratio is in line with 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 | 20.86 | ||
| EV/EBITDA | 13.15 |
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)5.64
PEG (5Y)1.84
EPS Next 2Y6.7%
EPS Next 3Y6.79%
5. Dividend
5.1 Amount
AOS has a Yearly Dividend Yield of 1.90%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 1.14, AOS pays a better dividend. On top of this AOS pays more dividend than 97.56% of the companies listed in the same industry.
AOS's Dividend Yield is comparable with the S&P500 average which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.9% |
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
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%
73.61
+1.86 (+2.59%)
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 Cap10.31B
Analysts71
Price Target81.52 (10.75%)
Short Float %2.54%
Short Ratio1.94
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.9% |
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)5.52%
PT rev (3m)6.42%
EPS NQ rev (1m)-1.19%
EPS NQ rev (3m)-1.79%
EPS NY rev (1m)1.21%
EPS NY rev (3m)1.29%
Revenue NQ rev (1m)1.01%
Revenue NQ rev (3m)0.76%
Revenue NY rev (1m)0.74%
Revenue NY rev (3m)0.59%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.95 | ||
| Fwd PE | 17.34 | ||
| P/S | 2.72 | ||
| P/FCF | 20.86 | ||
| P/OCF | 17.3 | ||
| P/B | 5.59 | ||
| P/tB | 13.57 | ||
| EV/EBITDA | 13.15 |
EPS(TTM)3.69
EY5.01%
EPS(NY)4.25
Fwd EY5.77%
FCF(TTM)3.53
FCFY4.79%
OCF(TTM)4.25
OCFY5.78%
SpS27.05
BVpS13.17
TBVpS5.43
PEG (NY)5.64
PEG (5Y)1.84
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 | 8.15 |
F-Score4
WACC10.45%
ROIC/WACC2.16
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%