A.O. Smith Corp
Exchange: NYSESector: IndustrialsIndustry: Specialty Industrial Machinery
A. O. Smith Corporation manufactures and markets water heaters and boilers to the residential and commercial end markets primarily in the United States, Canada, China, Europe, India, and the Middle East. It operates in two segments, North America and Rest of World. The company offers electric, natural gas, gas tankless, and liquid propane model water heaters, as well as solar tank units for applications in residences, restaurants, hotels and motels, laundries, car washes, and small businesses; and residential boilers, as well as commercial boilers primarily for space heating applications in hospitals, schools, hotels, and other large commercial buildings. It also provides expansion tanks, commercial solar water heating systems, swimming pool and spa heaters, and related products and parts. The company sells its products through independent wholesale plumbing distributors, hardware and home center chains, and manufacturer representative firms. It sells water heaters to approximately 7,000 retail outlets, as well as water treatment products to 4,500 retail outlets in China. The company is headquartered in Milwaukee, Wisconsin.
Did you know?
AOS's revenue grew at a 4.2% CAGR over the last 6 years.
Current Price
$64.35
-1.12%GoodMoat Value
$64.23
0.2% overvaluedProfile
Valuation (TTM)
Market Cap$8.96B
P/E16.40
EV$9.06B
P/B4.82
Shares Out139.24M
P/Sales2.34
Revenue$3.83B
EV/EBITDA11.01
A.O. Smith Corp (AOS) Stock Analysis
GoodMoat Analysis
A.O. Smith is a high-quality, profitable manufacturer of water heaters and boilers, demonstrating strong returns (29.4% ROE) and financial discipline (low debt). Its moat appears narrow, and the current price is near the platform's neutral target, suggesting a full valuation.
Read full analysis
A.O. Smith Corporation is a leading global manufacturer of residential and commercial water heaters and boilers. The company exhibits strong quality indicators, including a high Return on Equity of 29.4%, a robust operating margin of 19.0%, and a conservative balance sheet with a Debt/Equity ratio of just 0.10. Its 5.9% Free Cash Flow Yield and consistent dividend underscore its financial health. Applying the GoodMoat framework, the company's moat is likely narrow, potentially scoring low on the 14-point scale. It may possess elements of brand strength and niche dominance in specific water heating segments, but it lacks the clear, durable competitive advantages like network effects or high switching costs that define a wide moat. The valuation appears full, with a P/E of 17x and the current price of $66.9 aligning closely with the GoodMoat neutral target of $64.23. According to the Decision Framework, this suggests a marginal to unfavourable valuation scenario, as the stock does not offer a meaningful margin of safety. For a value investor, A.O. Smith represents a well-run business but one that may not be priced at a level that provides a sufficient discount to its intrinsic value to warrant deep investigation, barring a more attractive entry point. Analysis based on data as of 2024-05-15.
Market Cap$8.96B
Current Price$64.35
P/E Ratio16.40
Forward P/E—
PEG Ratio0.82
EPS$3.85
Book Value$13.34
P/B Ratio4.82
AOS Financial Charts
FCF vs CAPEX
FCFCAPEX
Forward estimates use 5.7% FCF growth (CAGR)
Cash vs Debt
Net Debt: 18M
Revenue
3.0B
FY19
2.9B
FY20
3.5B
FY21
3.8B
FY22
3.9B
FY23
3.8B
FY24
3.8B
FY25
Net Income
370M
FY19
345M
FY20
487M
FY21
236M
FY22
557M
FY23
534M
FY24
546M
FY25
AOS 52-Week Range
$58.44
$80.47
50-Day MA: $72.20200-Day MA: $69.49
Did you know?
AOS's revenue grew at a 4.2% CAGR over the last 6 years.
A.O. Smith Corp (AOS) Financial Summary
A.O. Smith Corp (AOS) is a Industrials company in the Specialty Industrial Machinery industry, listed on NYSE. The stock currently trades at $64.35 with a market capitalization of $8.96B.
Key valuation metrics include a P/E ratio of 16.40, price-to-book ratio of 4.82, and EPS of $3.85. The company reports a profit margin of 14.3% and return on equity of 29.4%.
AOS Key Financial Metrics
| Metric | Value |
|---|---|
| Market Cap | $8.96B |
| P/E Ratio | 16.40 |
| EPS | $3.85 |
| P/B Ratio | 4.82 |
| P/S Ratio | 2.34 |
| EV/EBITDA | 11.01 |
| Dividend Yield | 2.18% |
| Profit Margin | 14.3% |
| Return on Equity | 29.4% |
| Debt/Equity | 0.10 |
AOS Revenue & Earnings History
| Year | Revenue | Net Income |
|---|---|---|
| FY19 | $2.99B | $370.00M |
| FY20 | $2.90B | $344.90M |
| FY21 | $3.54B | $487.10M |
| FY22 | $3.75B | $235.70M |
| FY23 | $3.85B | $556.60M |
| FY24 | $3.82B | $533.60M |
| FY25 | $3.83B | $546.20M |
A.O. Smith Corp (AOS) Valuation
Based on GoodMoat's DCF model, A.O. Smith Corp has a fair value estimate of $64.23. At the current price of $64.35, the stock appears 0.2% overvalued relative to our intrinsic value estimate.
AOS Quality Indicators
A.O. Smith Corp maintains a profit margin of 14.3% and an operating margin of 19.0%. Return on equity stands at 29.4%. The current ratio is 1.50. Debt-to-equity ratio is 0.10.
About A.O. Smith Corp
A. O. Smith Corporation manufactures and markets water heaters and boilers to the residential and commercial end markets primarily in the United States, Canada, China, Europe, India, and the Middle East. It operates in two segments, North America and Rest of World. The company offers electric, natural gas, gas tankless, and liquid propane model water heaters, as well as solar tank units for applications in residences, restaurants, hotels and motels, laundries, car washes, and small businesses; and residential boilers, as well as commercial boilers primarily for space heating applications in hospitals, schools, hotels, and other large commercial buildings. It also provides expansion tanks, commercial solar water heating systems, swimming pool and spa heaters, and related products and parts. The company sells its products through independent wholesale plumbing distributors, hardware and home center chains, and manufacturer representative firms. It sells water heaters to approximately 7,000 retail outlets, as well as water treatment products to 4,500 retail outlets in China. The company is headquartered in Milwaukee, Wisconsin.
AOS Free Cash Flow
A.O. Smith Corp generated $546.00M in trailing twelve-month free cash flow, representing an FCF yield of 6.09%. This strong FCF yield suggests the company generates substantial cash relative to its market value.
AOS Shares Outstanding
A.O. Smith Corp has 0.14 billion shares outstanding at a share price of $64.35, giving it a market capitalization of $8.96B.
AOS Recent Insider Trades
Recent insider transactions at A.O. Smith Corp include:
| Insider | Type | Shares | Value |
|---|---|---|---|
| Schuh Darrell W. (SVP; President & GM Lochinvar) | SELL | 1,104 | $82126.34 |
| Schuh Darrell W. (SVP; President & GM Lochinvar) | SELL | 356 | $28439.06 |