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A. O. Smith

NYSE:AOS
Snowflake Description

Outstanding track record with flawless balance sheet.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
AOS
NYSE
$7B
Market Cap
  1. Home
  2. US
  3. Capital Goods
Company description

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. The last earnings update was 68 days ago. More info.


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  • A. O. Smith has significant price volatility in the past 3 months.
AOS Share Price and Events
7 Day Returns
-1%
NYSE:AOS
-0.3%
US Building
0.8%
US Market
1 Year Returns
-25.5%
NYSE:AOS
3.9%
US Building
4.8%
US Market
AOS Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
A. O. Smith (AOS) -1% -2% -20.4% -25.5% -1.3% 76.6%
US Building -0.3% 3.7% 6.5% 3.9% 10.7% 24.7%
US Market 0.8% 4.3% 2.8% 4.8% 37.9% 43.5%
1 Year Return vs Industry and Market
  • AOS underperformed the Building industry which returned 3.9% over the past year.
  • AOS underperformed the Market in United States of America which returned 4.8% over the past year.
Price Volatility
AOS
Industry
5yr Volatility vs Market

Value

 Is A. O. Smith undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of A. O. Smith to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for A. O. Smith.

NYSE:AOS Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 11 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 9.4%
Perpetual Growth Rate 10-Year US Government Bond Rate 2.7%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for NYSE:AOS
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year US Govt Bond Rate 2.7%
Equity Risk Premium S&P Global 6%
Building Unlevered Beta Simply Wall St/ S&P Global 1.14
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 1.138 (1 + (1- 21%) (4.53%))
1.119
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
1.12
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 2.73% + (1.119 * 5.96%)
9.4%

Discounted Cash Flow Calculation for NYSE:AOS using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for A. O. Smith is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

NYSE:AOS DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (USD, Millions) Source Present Value
Discounted (@ 9.4%)
2020 450.07 Analyst x6 411.39
2021 461.50 Analyst x2 385.58
2022 480.00 Analyst x2 366.58
2023 525.00 Analyst x1 366.48
2024 547.97 Est @ 4.38% 349.65
2025 569.25 Est @ 3.88% 332.01
2026 589.38 Est @ 3.54% 314.20
2027 608.79 Est @ 3.29% 296.66
2028 627.82 Est @ 3.13% 279.64
2029 646.70 Est @ 3.01% 263.29
Present value of next 10 years cash flows $3,365.49
NYSE:AOS DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2029 × (1 + g) ÷ (Discount Rate – g)
= $646.70 × (1 + 2.73%) ÷ (9.4% – 2.73%)
$9,957.08
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= $9,957.08 ÷ (1 + 9.4%)10
$4,053.91
NYSE:AOS Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= $3,365.49 + $4,053.91
$7,419.40
Equity Value per Share
(USD)
= Total value / Shares Outstanding
= $7,419.40 / 167.20
$44.38
NYSE:AOS Discount to Share Price
Calculation Result
Value per share (USD) From above. $44.38
Current discount Discount to share price of $44.60
= -1 x ($44.60 - $44.38) / $44.38
-0.5%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

  • The current share price of A. O. Smith is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for A. O. Smith's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are A. O. Smith's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
NYSE:AOS PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2019-03-31) in USD $2.56
NYSE:AOS Share Price ** NYSE (2019-07-15) in USD $44.6
United States of America Building Industry PE Ratio Median Figure of 31 Publicly-Listed Building Companies 18.23x
United States of America Market PE Ratio Median Figure of 3,084 Publicly-Listed Companies 18.01x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of A. O. Smith.

NYSE:AOS PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= NYSE:AOS Share Price ÷ EPS (both in USD)

= 44.6 ÷ 2.56

17.41x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • A. O. Smith is good value based on earnings compared to the US Building industry average.
  • A. O. Smith is good value based on earnings compared to the United States of America market.
Price based on expected Growth
Does A. O. Smith's expected growth come at a high price?
Raw Data
NYSE:AOS PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 17.41x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 11 Analysts
7.1%per year
United States of America Building Industry PEG Ratio Median Figure of 26 Publicly-Listed Building Companies 1.36x
United States of America Market PEG Ratio Median Figure of 2,124 Publicly-Listed Companies 1.59x

*Line of best fit is calculated by linear regression .

NYSE:AOS PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 17.41x ÷ 7.1%

2.46x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • A. O. Smith is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on A. O. Smith's assets?
Raw Data
NYSE:AOS PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2019-03-31) in USD $10.46
NYSE:AOS Share Price * NYSE (2019-07-15) in USD $44.6
United States of America Building Industry PB Ratio Median Figure of 37 Publicly-Listed Building Companies 2.24x
United States of America Market PB Ratio Median Figure of 5,240 Publicly-Listed Companies 1.81x
NYSE:AOS PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= NYSE:AOS Share Price ÷ Book Value per Share (both in USD)

= 44.6 ÷ 10.46

4.26x

* Primary Listing of A. O. Smith.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • A. O. Smith is overvalued based on assets compared to the US Building industry average.
X
Value checks
We assess A. O. Smith's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Building industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Building industry average (and greater than 0)? (1 check)
  5. A. O. Smith has a total score of 2/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

Future Performance

 How is A. O. Smith expected to perform in the next 1 to 3 years based on estimates from 11 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
7.1%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is A. O. Smith expected to grow at an attractive rate?
  • A. O. Smith's earnings growth is expected to exceed the low risk savings rate of 2.7%.
Growth vs Market Checks
  • A. O. Smith's earnings growth is positive but not above the United States of America market average.
  • A. O. Smith's revenue growth is positive but not above the United States of America market average.
Annual Growth Rates Comparison
Raw Data
NYSE:AOS Future Growth Rates Data Sources
Data Point Source Value (per year)
NYSE:AOS Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 11 Analysts 7.1%
NYSE:AOS Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 11 Analysts 4.3%
United States of America Building Industry Earnings Growth Rate Market Cap Weighted Average 12.2%
United States of America Building Industry Revenue Growth Rate Market Cap Weighted Average 4%
United States of America Market Earnings Growth Rate Market Cap Weighted Average 14.1%
United States of America Market Revenue Growth Rate Market Cap Weighted Average 7.5%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
NYSE:AOS Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 11 Analyst Estimates (S&P Global) See Below
All numbers in USD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
NYSE:AOS Future Estimates Data
Date (Data in USD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2023-12-31 3,890 591 2
2022-12-31 3,629 549 561 3
2021-12-31 3,495 539 525 3
2020-12-31 3,362 538 478 11
2019-12-31 3,233 498 446 11
NYSE:AOS Past Financials Data
Date (Data in USD Millions) Revenue Cash Flow Net Income *
2019-03-31 3,148 427 435
2018-12-31 3,188 449 444
2018-09-30 3,144 465 341
2018-06-30 3,140 426 330
2018-03-31 3,045 381 308
2017-12-31 2,997 326 297
2017-09-30 2,926 333 357
2017-06-30 2,860 365 346
2017-03-31 2,789 409 341
2016-12-31 2,686 447 327
2016-09-30 2,627 378 324
2016-06-30 2,568 446 314

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • A. O. Smith's earnings are expected to grow by 7.1% yearly, however this is not considered high growth (20% yearly).
  • A. O. Smith's revenue is expected to grow by 4.3% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
NYSE:AOS Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 11 Analyst Estimates (S&P Global) See Below

All data from A. O. Smith Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NYSE:AOS Future Estimates Data
Date (Data in USD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2023-12-31 3.65 3.65 3.65 1.00
2022-12-31 3.40 3.40 3.40 1.00
2021-12-31 3.20 3.20 3.20 1.00
2020-12-31 2.91 3.05 2.85 10.00
2019-12-31 2.68 2.73 2.60 10.00
NYSE:AOS Past Financials Data
Date (Data in USD Millions) EPS *
2019-03-31 2.56
2018-12-31 2.60
2018-09-30 1.99
2018-06-30 1.92
2018-03-31 1.79
2017-12-31 1.72
2017-09-30 2.06
2017-06-30 1.99
2017-03-31 1.96
2016-12-31 1.87
2016-09-30 1.85
2016-06-30 1.78

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Unable to establish if A. O. Smith will efficiently use shareholders’ funds in the future without estimates of Return on Equity.
X
Future performance checks
We assess A. O. Smith's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United States of America market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United States of America market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
A. O. Smith has a total score of 1/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

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

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare A. O. Smith's growth in the last year to its industry (Building).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • A. O. Smith's year on year earnings growth rate has been positive over the past 5 years.
  • A. O. Smith's 1-year earnings growth exceeds its 5-year average (41.3% vs 14.7%)
  • A. O. Smith's earnings growth has exceeded the US Building industry average in the past year (41.3% vs 24.3%).
Earnings and Revenue History
A. O. Smith's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from A. O. Smith Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NYSE:AOS Past Revenue, Cash Flow and Net Income Data
Date (Data in USD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2019-03-31 3,148.10 434.70 735.10
2018-12-31 3,187.90 444.20 743.10
2018-09-30 3,144.00 340.60 743.90
2018-06-30 3,139.80 329.70 737.80
2018-03-31 3,044.70 307.60 718.90
2017-12-31 2,996.70 296.50 711.90
2017-09-30 2,926.20 356.50 705.20
2017-06-30 2,860.20 346.00 701.00
2017-03-31 2,789.00 340.70 682.70
2016-12-31 2,685.90 326.50 653.80
2016-09-30 2,627.20 323.60 639.20
2016-06-30 2,568.40 314.00 623.50
2016-03-31 2,554.90 298.00 622.90
2015-12-31 2,536.50 282.90 610.70
2015-09-30 2,523.90 256.30 613.90
2015-06-30 2,480.40 233.30 610.40
2015-03-31 2,422.30 219.50 588.40
2014-12-31 2,356.00 207.80 572.10
2014-09-30 2,288.10 197.00 553.00
2014-06-30 2,242.70 192.60 541.20
2014-03-31 2,196.40 177.40 535.40
2013-12-31 2,153.80 169.70 524.50
2013-09-30 2,119.20 170.50 510.10
2013-06-30 2,045.20 161.20 487.90
2013-03-31 1,980.30 154.10 465.20
2012-12-31 1,939.30 162.60 450.50
2012-09-30 1,890.80 150.90 426.40

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • A. O. Smith has efficiently used shareholders’ funds last year (Return on Equity greater than 20%).
  • A. O. Smith used its assets more efficiently than the US Building industry average last year based on Return on Assets.
  • A. O. Smith has improved its use of capital last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess A. O. Smith's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Building industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
A. O. Smith has a total score of 6/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is A. O. Smith's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up A. O. Smith's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • A. O. Smith is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • A. O. Smith's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of A. O. Smith's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of physical assets or inventory.
  • Debt is covered by short term assets, assets are 5.8x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from A. O. Smith Company Filings, last reported 3 months ago.

NYSE:AOS Past Debt and Equity Data
Date (Data in USD Millions) Total Equity Total Debt Cash & Short Term Investments
2019-03-31 1,749.20 284.40 633.30
2018-12-31 1,717.00 221.40 645.00
2018-09-30 1,756.20 193.30 617.80
2018-06-30 1,730.30 248.10 658.40
2018-03-31 1,708.40 293.20 679.70
2017-12-31 1,644.90 410.40 820.00
2017-09-30 1,665.90 449.70 767.90
2017-06-30 1,613.70 375.10 740.90
2017-03-31 1,566.40 369.40 722.30
2016-12-31 1,515.30 323.60 754.60
2016-09-30 1,525.60 336.20 678.80
2016-06-30 1,480.70 282.00 667.20
2016-03-31 1,478.50 287.30 640.80
2015-12-31 1,442.30 249.00 645.20
2015-09-30 1,422.40 260.80 606.40
2015-06-30 1,436.50 279.60 552.40
2015-03-31 1,405.10 303.90 574.90
2014-12-31 1,381.30 223.80 541.90
2014-09-30 1,375.20 254.50 523.70
2014-06-30 1,356.70 250.40 496.60
2014-03-31 1,343.40 227.00 472.50
2013-12-31 1,328.70 191.90 486.00
2013-09-30 1,252.60 227.80 476.80
2013-06-30 1,256.50 209.30 463.90
2013-03-31 1,235.70 229.10 451.40
2012-12-31 1,194.10 243.70 462.90
2012-09-30 1,191.40 279.60 482.20
  • A. O. Smith's level of debt (16.3%) compared to net worth is satisfactory (less than 40%).
  • The level of debt compared to net worth has been reduced over the past 5 years (16.9% vs 16.3% today).
  • Debt is well covered by operating cash flow (150.2%, greater than 20% of total debt).
  • Interest payments on debt are well covered by earnings (EBIT is 66.9x coverage).
X
Financial health checks
We assess A. O. Smith's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. A. O. Smith has a total score of 6/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

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

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
1.97%
Current annual income from A. O. Smith dividends. Estimated to be 2.1% next year.
If you bought $2,000 of A. O. Smith shares you are expected to receive $39 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • A. O. Smith's pays a higher dividend yield than the bottom 25% of dividend payers in United States of America (1.41%).
  • A. O. Smith's dividend is below the markets top 25% of dividend payers in United States of America (3.71%).
Upcoming dividend payment

Purchase A. O. Smith before the 'Buy Limit' to receive their next dividend payment.

Dividends are usually paid every 3 or 6 months, you can time your share purchase to take advantage of upcoming dividend payments.
Dividend payment calendar
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
NYSE:AOS Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 11 Analyst Estimates (S&P Global) See Below
United States of America Building Industry Average Dividend Yield Market Cap Weighted Average of 16 Stocks 1.8%
United States of America Market Average Dividend Yield Market Cap Weighted Average of 2018 Stocks 2.4%
United States of America Minimum Threshold Dividend Yield 10th Percentile 0.8%
United States of America Bottom 25% Dividend Yield 25th Percentile 1.4%
United States of America Top 25% Dividend Yield 75th Percentile 3.7%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

NYSE:AOS Future Dividends Estimate Data
Date (Data in $) Dividend per Share (annual) Avg. No. Analysts
2023-12-31
2022-12-31
2021-12-31
2020-12-31 0.96 4.00
2019-12-31 0.91 3.00
NYSE:AOS Past Annualized Dividends Data
Date (Data in $) Dividend per share (annual) Avg. Yield (%)
2019-07-08 0.880 1.962
2019-04-08 0.880 1.836
2019-01-16 0.880 1.729
2018-10-09 0.880 1.945
2018-07-09 0.720 1.244
2018-04-09 0.720 1.149
2018-01-19 0.720 1.116
2017-10-09 0.560 0.914
2017-07-11 0.560 0.994
2017-04-12 0.560 1.025
2017-01-20 0.560 1.119
2016-10-06 0.480 1.000
2016-07-11 0.480 1.018
2016-04-11 0.480 1.176
2016-01-25 0.480 1.345
2015-10-12 0.380 1.027
2015-07-13 0.380 1.115
2015-04-14 0.380 1.097
2015-01-26 0.380 1.207
2014-10-13 0.300 1.124
2014-07-07 0.300 1.244
2014-04-07 0.300 1.247
2014-01-28 0.300 1.269
2013-10-10 0.240 0.925
2013-07-09 0.240 1.132
2013-04-15 0.240 1.271
2013-01-15 0.200 1.133
2012-10-08 0.200 1.309
2012-07-09 0.200 1.506
2012-04-16 0.160 1.374
2012-01-13 0.160 1.440
2011-10-10 0.160 1.691
2011-07-11 0.160 1.717
2011-04-12 0.140 1.355
2011-01-14 0.140 1.333
2010-10-11 0.840 8.616
2010-07-23 0.840 9.220
2010-05-05 0.130 1.594
2010-04-20 0.130 1.494
2010-02-26 0.130 1.531
2010-01-26 0.130 1.795
2009-11-03 0.130 1.801
2009-08-04 0.130 1.965
2009-07-17 0.127 1.932

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Dividends per share have been volatile in the past 10 years (annual drop of over 20%).
  • Dividends per share have increased over the past 10 years.
Current Payout to shareholders
What portion of A. O. Smith's earnings are paid to the shareholders as a dividend.
  • Dividends paid are well covered by earnings (3.2x coverage).
Future Payout to shareholders
  • Insufficient estimate data to determine if a dividend will be paid in 3 years and that it will be sustainable.
X
Income/ dividend checks
We assess A. O. Smith's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.8%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can A. O. Smith afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. A. O. Smith has a total score of 3/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

 What is the CEO of A. O. Smith's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Kevin Wheeler
COMPENSATION $3,452,974
AGE 59
TENURE AS CEO 0.8 years
CEO Bio

Mr. Kevin J. Wheeler is Chief Executive Officer of A. O. Smith Corporation since September 1, 2018. He has been President of A. O. Smith Corporation since May 18, 2017 and served its Senior Vice President since 2013 until May 18, 2017. He served as Chief Operating Officer of A. O. Smith Corporation from 2017 to 2018. Mr. Wheeler served as President and General Manager of North America, India & Europe Water Heating and Export business since September 2011 until 2017. Mr. Wheeler served as Senior Vice President of Water Heating since May 2007. Mr. Wheeler served as a Vice President at State Industries, Inc. He has been a Director of A. O. Smith Corporation since July 11, 2017. Mr. Wheeler previously served as managing Director of A. O. Smith Corporation’s European operations, where he had responsibility for water heater business in Europe and the Middle East, and upon his return to the United States from the Netherlands, he served as Vice President-International, with responsibility for all European and Asian operations, including China. Mr. Wheeler joined A. O. Smith Corporation in 1993 as a Regional Sales Manager and has held positions of increasing responsibility. Mr. Wheeler has extensive sales, manufacturing and international experience in various executive positions.

CEO Compensation
  • Kevin's compensation has been consistent with company performance over the past year, both up more than 20%.
  • Kevin's remuneration is lower than average for companies of similar size in United States of America.
Management Team Tenure

Average tenure and age of the A. O. Smith management team in years:

5.9
Average Tenure
56
Average Age
  • The average tenure for the A. O. Smith management team is over 5 years, this suggests they are a seasoned and experienced team.
Management Team

Ajita Rajendra

TITLE
Executive Chairman
COMPENSATION
$7M
AGE
67

Kevin Wheeler

TITLE
CEO, President & Director
COMPENSATION
$3M
AGE
59
TENURE
0.8 yrs

Jim Stern

TITLE
Executive VP
COMPENSATION
$2M
AGE
56
TENURE
12.1 yrs

Mark Petrarca

TITLE
Senior Vice President of Human Resources & Public Affairs
COMPENSATION
$1M
AGE
55
TENURE
13.5 yrs

Ding Wei

TITLE
Senior VP & President of A. O. Smith China
COMPENSATION
$2M
AGE
56

Chuck Lauber

TITLE
Executive VP & CFO
AGE
56
TENURE
0.2 yrs

Paul Dana

TITLE
Senior Vice President of Global Operations
AGE
56
TENURE
0.5 yrs

Bob Heideman

TITLE
CTO & Senior VP
AGE
52
TENURE
8.6 yrs

Peter Martineau

TITLE
Senior VP & Chief Information Officer
AGE
64
TENURE
3.3 yrs

Pat Ackerman

TITLE
Senior VP of Investor Relations
AGE
58
TENURE
10.8 yrs
Board of Directors Tenure

Average tenure and age of the A. O. Smith board of directors in years:

14
Average Tenure
66.5
Average Age
  • The average tenure for the A. O. Smith board of directors is over 10 years, this suggests they are a seasoned and experienced board.
Board of Directors

Kevin Wheeler

TITLE
CEO, President & Director
COMPENSATION
$3M
AGE
59
TENURE
2 yrs

Bruce Smith

TITLE
Independent Director
COMPENSATION
$244K
AGE
70
TENURE
24.5 yrs

Ajita Rajendra

TITLE
Executive Chairman
COMPENSATION
$7M
AGE
67
TENURE
5.3 yrs

Ron Brown

TITLE
Independent Director
COMPENSATION
$226K
AGE
66
TENURE
18.5 yrs

Bill Greubel

TITLE
Independent Director
COMPENSATION
$226K
AGE
67
TENURE
13.5 yrs

Gene Wulf

TITLE
Lead Director
COMPENSATION
$247K
AGE
68
TENURE
1.3 yrs

Mark Smith

TITLE
Independent Director
COMPENSATION
$216K
AGE
57
TENURE
18.5 yrs

Idelle Wolf

TITLE
Independent Director
COMPENSATION
$216K
AGE
66
TENURE
14.5 yrs

Paul Jones

TITLE
Director
COMPENSATION
$216K
AGE
70
TENURE
14.6 yrs

Ilham Kadri

TITLE
Director
COMPENSATION
$216K
AGE
50
TENURE
2.6 yrs
Who owns this company?
Recent Insider Trading
  • A. O. Smith individual insiders have only sold shares in the past 3 months.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price ($) Value ($)
09. May 19 Sell Paul Jones Individual 09. May 19 09. May 19 -1,000 $49.50 $-49,500
06. May 19 Sell Bruce Smith Individual 03. May 19 03. May 19 -5,000 $53.62 $-268,101
02. May 19 Sell Ronald Brown Individual 02. May 19 02. May 19 -8,000 $52.45 $-419,602
08. Feb 19 Sell Paul Jones Individual 08. Feb 19 08. Feb 19 -20,000 $49.00 $-980,000
14. Nov 18 Sell Paul Jones Individual 13. Nov 18 13. Nov 18 -9,000 $45.99 $-413,902
22. Aug 18 Sell Paul Jones Individual 21. Aug 18 21. Aug 18 -4,591 $58.92 $-270,505
X
Management checks
We assess A. O. Smith's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. A. O. Smith has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

News

Simply Wall St News

Why A. O. Smith Corporation (NYSE:AOS) Looks Like A Quality Company

The Importance Of Debt To Return On Equity Virtually all companies need money to invest in the business, to grow profits. … Conservative use of debt to boost returns is usually a good move for shareholders, though it does leave the company more exposed to interest rate risesO … In my book the highest quality companies have high return on equity, despite low debt.

Simply Wall St -

Top Bear Market Investment: A. O. Smith Corporation (NYSE:AOS)

This is the beginning of your research, but before you decide to buy AOS, I highly urge you to understand more about the company, in particular, in these following areas: Future Outlook: What are well-informed industry analysts predicting for AOS’s future growth. … Take a look at our free research report of analyst consensus for AOS’s outlookO … The intrinsic value infographic in our free research report helps visualize whether AOS is currently mispriced by the market.

Simply Wall St -

What To Know Before Buying A. O. Smith Corporation (NYSE:AOS) For Its Dividend

Smith Corporation (NYSE:AOS) tend to be popular with investors, and for good reason - some research suggests a significant amount of all stock market returns come from reinvested dividends. Yet sometimes, investors buy a popular dividend stock because of its yield, and then lose money if the company's dividend doesn't live up to expectations. A 1.9% yield is nothing to get excited about, but investors probably think the long payment history suggests A. O. Smith has some staying power. The company also bought back stock during the year, equivalent to approximately 2.8% of the company's market capitalisation at the time. Before you buy any stock for its dividend however, you should always remember Warren Buffett's two rules: 1) Don't lose money, and 2) Remember rule #1O … We were also glad to see it growing earnings, but it was concerning to see the dividend has been cut at least once in the pastO … Earnings growth generally bodes well for the future value of company dividend payments.

Simply Wall St -

These Factors Make A. O. Smith Corporation (NYSE:AOS) An Interesting Investment

AOS is a company with great financial health as well as a a strong track record of performance. … This illustrates a strong track record, leading to a satisfying return on equity of 25%O … Take a look at our free research report of analyst consensus for AOS’s outlook.

Simply Wall St -

Here's What A. O. Smith Corporation's (NYSE:AOS) ROCE Can Tell Us

Smith's Current Liabilities Impact Its ROCE Current liabilities include invoices, such as supplier payments, short-term debt, or a tax bill, that need to be paid within 12 monthsO … The ROCE equation subtracts current liabilities from capital employed, so a company with a lot of current liabilities appears to have less capital employed, and a higher ROCE than otherwise. … Smith's ROCE With low current liabilities and a high ROCE, A.

Simply Wall St -

Is A. O. Smith Corporation (NYSE:AOS) As Strong As Its Balance Sheet Indicates?

On top of this, AOS has generated US$427m in operating cash flow during the same period of time, resulting in an operating cash to total debt ratio of 126%, signalling that AOS’s operating cash is sufficient to cover its debtO … Looking at AOS’s US$737m in current liabilities, it seems that the business has maintained a safe level of current assets to meet its obligations, with the current ratio last standing at 2.25x. … We can check to see whether AOS is able to meet its debt obligations by looking at the net interest coverage ratio.

Simply Wall St -

Estimating The Intrinsic Value Of A. O. Smith Corporation (NYSE:AOS)

A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, and so the sum of these future cash flows is then discounted to today's value: 10-year free cash flow (FCF) forecast 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Levered FCF ($, Millions) $422.34 $466.50 $504.00 $529.00 $538.00 $548.76 $560.94 $574.25 $588.49 $603.53 Growth Rate Estimate Source Analyst x5 Analyst x5 Analyst x1 Analyst x1 Analyst x1 Est @ 2% Est @ 2.22% Est @ 2.37% Est @ 2.48% Est @ 2.55% Present Value ($, Millions) Discounted @ 9.48% $385.77 $389.22 $384.10 $368.24 $342.08 $318.72 $297.58 $278.27 $260.48 $244.01 Present Value of 10-year Cash Flow (PVCF)= $3.27b "Est" = FCF growth rate estimated by Simply Wall St The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. … Terminal Value (TV) = FCF2029 × (1 + g) ÷ (r – g) = US$604m × (1 + 2.7%) ÷ (9.5% – 2.7%) = US$9.2b Present Value of Terminal Value (PVTV) = TV / (1 + r)10 = $US$9.2b ÷ ( 1 + 9.5%)10 = $3.71b The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is $6.98b. … NYSE:AOS Intrinsic value, May 21st 2019 The assumptions We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows.

Simply Wall St -

A. O. Smith Corporation (NYSE:AOS): What We Can Expect From This Growth Stock

Smith Corporation (NYSE:AOS) released its earnings announcement on 31 March 2019, analyst consensus outlook appear cautiously subdued, with earnings expected to grow by 5.9% in the upcoming year compared with the higher past 5-year average growth rate of 15%O … To understand the overall trajectory of AOS's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope. … NYSE:AOS Past and Future Earnings, May 14th 2019 From the current net income level of US$444m and the final forecast of US$551m by 2022, the annual rate of growth for AOS’s earnings is 7.1%.

Simply Wall St -

How Does A. O. Smith Corporation's (NYSE:AOS) Earnings Growth Stack Up Against Industry Performance?

Smith Corporation (NYSE:AOS) announced its most recent earnings (31 March 2019), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on averageO … How Did AOS's Recent Performance Stack Up Against Its Past. … AOS's trailing twelve-month earnings (from 31 March 2019) of US$435m has.

Simply Wall St -

Is Now The Time To Look At Buying A. O. Smith Corporation (NYSE:AOS)?

Smith Corporation (NYSE:AOS), which is in the building business, and is based in United States,A … saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. … With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share priceO

Simply Wall St -

Company Info

Description

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 operates through two segments, North America and Rest of World. The company offers water heaters for residences, restaurants, hotels and motels, office buildings, laundries, car washes, and small businesses; residential and commercial boilers for space heating applications in hospitals, schools, hotels, and other commercial buildings; and water treatment products, including on-the-go filtration bottles, point-of-use carbon and reverse osmosis products, point-of-entry water softeners, and whole-home water filtration products for residences, restaurants, hotels, and offices. It also provides food and beverage filtration products; expansion tanks, commercial solar water heating systems, swimming pool and spa heaters, and related products and parts; and heat pumps, combi-boilers, solar tank units, and air purification products. The company offers its products primarily under the A. O. Smith and State brands. It distributes its products through independent wholesale plumbing distributors, as well as through retail channels consisting of hardware and home center chains, and manufacturer representative firms; and offers Aquasana branded products directly to consumers through e-commerce, as well as other online retailers. A. O. Smith Corporation was founded in 1874 and is headquartered in Milwaukee, Wisconsin.

Details
Name: A. O. Smith Corporation
AOS
Exchange: NYSE
Founded: 1874
$7,456,963,855
167,196,499
Website: http://www.aosmith.com
Address: A. O. Smith Corporation
11270 West Park Place,
Suite 170,
Milwaukee,
Wisconsin, 53224,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NYSE AOS Common Stock New York Stock Exchange US USD 23. Apr 2009
DB 3SM Common Stock Deutsche Boerse AG DE EUR 23. Apr 2009
LSE 0L7A Common Stock London Stock Exchange GB USD 23. Apr 2009
BMV AOS * Common Stock Bolsa Mexicana de Valores MX MXN 23. Apr 2009
Number of employees
Current staff
Staff numbers
16,300
A. O. Smith employees.
Industry
Building Products
Capital Goods
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/07/16 00:24
End of day share price update: 2019/07/15 00:00
Last estimates confirmation: 2019/07/15
Last earnings filing: 2019/05/09
Last earnings reported: 2019/03/31
Last annual earnings reported: 2018/12/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

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.