Smith A O Corp

Consumer Discretionary
Consumer Electronics/Appliances
www.aosmith.com

Earnings Score
Moat Score
Safety Score

Market Cap $10.78B
PE 19
Debt $119.70M
Cash $219.30M
EV $10.68B
FCF $483.90M

Earnings

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Sales & Net Margins

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Earnings	$561.20M
EBIT	$811.00M
ROE	29%
ROA	26%
FCF	$483.90M
Equity	$1.92B
Growth Stability	59%
PE	19.21
PEG	2.78
PB	5.62
P/FCF	22.28
P/S	2.77
Price/Cash	0.02
Debt/Equity	0.06
Debt/FCF	0.25
Net Margins	15%
Gross Margins	38%
Op. Margins	21%
Earnings CAGR	4%
Sales Growth YoY	-4%
Sales Growth QoQ	-12%
Sales CAGR	5%
FCF CAGR	8%
Equity CAGR	3%
Earnings Stability	0.21
Earnings Growth YoY	-11%
Earnings Growth QoQ	-23%
Earnings CAGR 5Y	7%

Sales CAGR 5Y	8%
FCF CAGR 5Y	3%
Equity CAGR 5Y	2%
Earnings CAGR 3Y	2%
Sales CAGR 3Y	2%
FCF CAGR 3Y	6%
Equity CAGR 3Y	3%
Market Cap	$10.78B
Revenue	$3.89B
Dividend Yield	2%
Payout Ratio	34%
Assets	$3.15B
Total Debt	$119.70M
Cash	$219.30M
Shares Outstanding	145.58M
EV	10.68B
Earnings Score	9%
Moat Score	96%
Safety Score	85%
Final Score	63%
Working Capital	568.3M
Current Ratio	1.67
Gross Profit	$1.49B
Shares Growth 3y	-3%
Equity Growth QoQ	0%
Equity Growth YoY	2%

Assets & ROA

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Stockholders Equity & ROE

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A.O. Smith Corporation manufactures and markets comprehensive lines of residential and commercial gas, gas tankless, and electric water heaters. Supplementary products include water heating equipment, condensing and noncondensing boilers, and water system tanks. The company's two operating segments are by geographic region: North America (majority of total revenue) and the Rest of the World. A material portion of sales in North America derive from replacing existing products, and the company utilizes a wholesale distribution channel and multiple selling locations. The Rest of the World segment sells primarily to Asian countries and operates sales offices to expand distribution and market its product portfolio.

SEC Filings

Direct access to Smith A O Corp (AOS) Annual Reports (10K) and Quarterly Reports (10Q) from the SEC website.

2024
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31
2023
- 10-K Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31
2022
- 10-K Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31

Sector Comparison

How does Smith A O Corp compare to its competitors?

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Peter Lynch's Chart

This chart shows the current pricing of Smith A O Corp compared to its past. The addition of the earnings trend line provides further insights into the company's earnings power.

CAGR 4%

Stability 21%

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Smith A O Corp Discounted Cash Flow

Fully customizable DCF calculator online for Smith A O Corp.

Years

Calculation mode

= $8.4B

	0	1	2	3	4	5	6	7	8	9	10	TV
fcf	$484M	$523M	$564M	$609M	$658M	$711M	$767M	$829M	$895M	$966M	$1B	$10B
DCF		$475M	$466M	$458M	$449M	$441M	$433M	$425M	$418M	$410M	$402M	$4B
Value	$8.4B

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

Years	12/2014	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	TTM
Net Margins	9%	11%	12%	10%	14%	12%	12%	14%	6%	14%	15%
ROA	-	17%	18%	18%	20%	17%	16%	20%	11%	25%	26%
ROE	-	20%	22%	18%	26%	22%	19%	27%	13%	30%	29%

Good Net Margins (14.59%)

Net Margins are high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Safety and Stability

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Years	12/2014	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	TTM
Debt over FCF	-	0.96	0.9	1.8	0.61	0.74	0.24	0.36	1.1	0.23	0.25
Debt over Equity	0.17	0.18	0.22	0.25	0.13	0.17	0.06	0.11	0.2	0.07	0.06
Growth Stability	-	-	-	100%	100%	100%	93%	100%	59%	100%	59%

Good Debt/FCF ratio (0.25)

Net Margins are high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Good Debt/Equity ratio (0.06)

The company is not overleveraged and has a good balance between equity and debt.

Bad Graham’s Stability (59%)

The company has a bad stability in its earnings, which is a sign of a bad competitive advantage.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Years	12/2014	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	CAGR 5Y
Revenue YoY growth	-	8%	6%	12%	6%	-6%	-3%	22%	6%	3%	8%
Earnings YoY growth	-	36%	15%	-9%	50%	-17%	-7%	41%	-52%	136%	7%
Equity YoY growth	-	4%	5%	9%	4%	-3%	11%	-1%	-5%	6%	2%
FCF YoY growth	-	52%	35%	-37%	57%	8%	29%	12%	-43%	86%	3%