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Market Cap

US$10.9b

Last Updated

2021/04/11 22:14 UTC

Data Sources

Company Financials +

Executive Summary

A. O. Smith Corporation manufactures and markets residential and commercial gas and electric water heaters, boilers, tanks, and water treatment products in North America, China, Europe, and India. More Details


Snowflake Analysis

Flawless balance sheet established dividend payer.


Similar Companies

Share Price & News

How has A. O. Smith's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AOS is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: AOS's weekly volatility (5%) has been stable over the past year.


Market Performance


7 Day Return

-0.9%

AOS

2.3%

US Building

2.1%

US Market


1 Year Return

67.3%

AOS

102.6%

US Building

56.3%

US Market

Return vs Industry: AOS underperformed the US Building industry which returned 102.6% over the past year.

Return vs Market: AOS exceeded the US Market which returned 56.3% over the past year.


Shareholder returns

AOSIndustryMarket
7 Day-0.9%2.3%2.1%
30 Day4.5%4.8%2.4%
90 Day18.2%14.4%6.1%
1 Year70.7%67.3%105.3%102.6%59.1%56.3%
3 Year11.4%5.5%90.2%75.1%65.7%55.1%
5 Year83.3%69.8%139.4%107.7%122.3%97.6%

Long-Term Price Volatility Vs. Market

How volatile is A. O. Smith's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is A. O. Smith undervalued compared to its fair value and its price relative to the market?

31.51x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: AOS ($67.27) is trading above our estimate of fair value ($52.11)

Significantly Below Fair Value: AOS is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: AOS is poor value based on its PE Ratio (31.5x) compared to the US Building industry average (25.3x).

PE vs Market: AOS is poor value based on its PE Ratio (31.5x) compared to the US market (22.3x).


Price to Earnings Growth Ratio

PEG Ratio: AOS is poor value based on its PEG Ratio (3.3x)


Price to Book Ratio

PB vs Industry: AOS is overvalued based on its PB Ratio (5.9x) compared to the US Building industry average (3.2x).


Future Growth

How is A. O. Smith forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

9.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AOS's forecast earnings growth (9.6% per year) is above the savings rate (2%).

Earnings vs Market: AOS's earnings (9.6% per year) are forecast to grow slower than the US market (18.6% per year).

High Growth Earnings: AOS's earnings are forecast to grow, but not significantly.

Revenue vs Market: AOS's revenue (5.2% per year) is forecast to grow slower than the US market (9.9% per year).

High Growth Revenue: AOS's revenue (5.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AOS's Return on Equity is forecast to be high in 3 years time (25.2%)


Past Performance

How has A. O. Smith performed over the past 5 years?

3.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AOS has high quality earnings.

Growing Profit Margin: AOS's current net profit margins (11.9%) are lower than last year (12.4%).


Past Earnings Growth Analysis

Earnings Trend: AOS's earnings have grown by 3.3% per year over the past 5 years.

Accelerating Growth: AOS's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: AOS had negative earnings growth (-6.7%) over the past year, making it difficult to compare to the Building industry average (21.2%).


Return on Equity

High ROE: AOS's Return on Equity (18.7%) is considered low.


Financial Health

How is A. O. Smith's financial position?


Financial Position Analysis

Short Term Liabilities: AOS's short term assets ($1.6B) exceed its short term liabilities ($886.3M).

Long Term Liabilities: AOS's short term assets ($1.6B) exceed its long term liabilities ($426.1M).


Debt to Equity History and Analysis

Debt Level: AOS's debt to equity ratio (6.1%) is considered satisfactory.

Reducing Debt: AOS's debt to equity ratio has reduced from 17.3% to 6.1% over the past 5 years.

Debt Coverage: AOS's debt is well covered by operating cash flow (496.6%).

Interest Coverage: AOS's interest payments on its debt are well covered by EBIT (60.5x coverage).


Balance Sheet


Dividend

What is A. O. Smith current dividend yield, its reliability and sustainability?

1.55%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: AOS's dividend (1.55%) is higher than the bottom 25% of dividend payers in the US market (1.26%).

High Dividend: AOS's dividend (1.55%) is low compared to the top 25% of dividend payers in the US market (3.5%).


Stability and Growth of Payments

Stable Dividend: AOS's dividends per share have been stable in the past 10 years.

Growing Dividend: AOS's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (45.9%), AOS's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: AOS's dividends in 3 years are forecast to be well covered by earnings (38.5% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.9yrs

Average management tenure


CEO

Kevin Wheeler (60 yo)

2.58yrs

Tenure

US$5,174,751

Compensation

Mr. Kevin J. Wheeler has been Chief Executive Officer of A. O. Smith Corporation since September 1, 2018. Mr. Wheeler has been President of A. O. Smith Corporation since May 18, 2017 and served its Senior ...


CEO Compensation Analysis

Compensation vs Market: Kevin's total compensation ($USD5.17M) is below average for companies of similar size in the US market ($USD10.98M).

Compensation vs Earnings: Kevin's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

Experienced Management: AOS's management team is considered experienced (2.9 years average tenure).


Board Members

Experienced Board: AOS's board of directors are seasoned and experienced ( 15.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: AOS insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

A. O. Smith Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: A. O. Smith Corporation
  • Ticker: AOS
  • Exchange: NYSE
  • Founded: 1874
  • Industry: Building Products
  • Sector: Capital Goods
  • Market Cap: US$10.869b
  • Shares outstanding: 161.57m
  • Website: https://www.aosmith.com

Number of Employees


Location

  • A. O. Smith Corporation
  • 11270 West Park Place
  • Suite 170
  • Milwaukee
  • Wisconsin
  • 53224-9508
  • United States

Listings


Biography

A. O. Smith Corporation manufactures and markets residential and commercial gas and electric water heaters, boilers, tanks, and water treatment products in North America, China, Europe, and India. It opera...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/04/11 22:14
End of Day Share Price2021/04/09 00:00
Earnings2020/12/31
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.