A. O. Smith Corp. (AOS) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

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Comparison

Company

Score

Quality

Valuation

Financial

Technical

Simpson Manufacturing Co., Inc.

The AZEK Co., Inc.

Watsco, Inc.

Allegion Plc

SPX Technologies, Inc.

A. O. Smith Corp.

Carlisle Cos., Inc.

Fortune Brands Innovations, Inc.

Griffon Corp.

Masco Corp.

Otis Worldwide Corp.

Why is A. O. Smith Corp. ?

High Management Efficiency with a high ROE of 24.62%

Company has a low Debt to Equity ratio (avg) at times

Flat results in Jun 25

INTEREST COVERAGE RATIO(Q) Lowest at 4,917.39
CASH AND EQV(HY) Lowest at USD 378.1 MM
DEBT-EQUITY RATIO (HY) Highest at 8.33 %

With ROE of 28.76%, it has a fair valuation with a 6.42 Price to Book Value

The stock is trading at a premium compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of -9.05%, its profits have fallen by -8%

Below par performance in long term as well as near term

Along with generating -9.05% returns in the last 1 year, the stock has also underperformed S&P 500 in the last 3 years, 1 year and 3 months

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to A. O. Smith Corp. should be less than 10%
Overall Portfolio exposure to Building Products should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Building Products)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is A. O. Smith Corp. for you?

Low Risk, Low Return

Absolute

Risk Adjusted

Volatility

A. O. Smith Corp.

-8.7%

-0.71

24.60%

S&P 500

13.22%

0.64

20.20%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

6.40%

EBIT Growth (5y)

12.92%

EBIT to Interest (avg)

88.05

Debt to EBITDA (avg)

Net Debt is too low

Net Debt to Equity (avg)

0.04

Sales to Capital Employed (avg)

1.85

Tax Ratio

24.19%

Dividend Payout Ratio

35.83%

Pledged Shares

Institutional Holding

100.00%

ROCE (avg)

40.58%

ROE (avg)

24.62%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

6.42

EV to EBIT

16.98

EV to EBITDA

15.25

EV to Capital Employed

6.23

EV to Sales

3.15

PEG Ratio

Dividend Yield

1.69%

ROCE (Latest)

36.67%

ROE (Latest)

28.76%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bearish

RSI

No Signal

Bollinger Bands

Mildly Bearish

Bearish

Moving Averages

Mildly Bullish (Daily)

KST

Bearish

Dow Theory

No Trend

Mildly Bearish

OBV

No Trend

Mildly Bullish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

5What is working for the Company

DIVIDEND PER SHARE(HY)

Highest at USD 5.88

RAW MATERIAL COST(Y)

Fallen by -1.81% (YoY

OPERATING PROFIT MARGIN(Q)

Highest at 22.37 %

EPS(Q)

Highest at USD 1.07

-18What is not working for the Company

INTEREST COVERAGE RATIO(Q)

Lowest at 4,917.39

CASH AND EQV(HY)

Lowest at USD 378.1 MM

DEBT-EQUITY RATIO (HY)

Highest at 8.33 %

INVENTORY TURNOVER RATIO(HY)

Lowest at 4.4 times

DEBTORS TURNOVER RATIO(HY)

Lowest at 5.88 times

INTEREST(Q)

Highest at USD 4.6 MM

Here's what is working for A. O. Smith Corp.

Dividend per share

Highest at USD 5.88 and Grown

In each year in the last five years

MOJO Watch

Company is distributing higher dividend from profits generated

DPS (USD)

Operating Profit Margin

Highest at 22.37 %

in the last five periods

MOJO Watch

Company's profit margin has improved

Operating Profit to Sales

EPS

Highest at USD 1.07

in the last five periods

MOJO Watch

Increasing profitability; company has created higher earnings for shareholders

EPS (USD)

Raw Material Cost

Fallen by -1.81% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has improved; this may lead to a rise in profit margin

Raw Material Cost as a percentage of Sales

Here's what is not working for A. O. Smith Corp.

Interest Coverage Ratio

Lowest at 4,917.39 and Fallen

In each period in the last five periods

MOJO Watch

The company's ability to manage interest payments is deteriorating

Operating Profit to Interest

Interest

At USD 4.6 MM has Grown at 58.62%

period on period (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (USD MM)

Interest

Highest at USD 4.6 MM

in the last five periods and Increased by 58.62% (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (USD MM)

Cash and Eqv

Lowest at USD 378.1 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is deteriorating

Cash and Cash Equivalents

Debt-Equity Ratio

Highest at 8.33 %

in the last five Semi-Annual periods

MOJO Watch

The company is borrowing more to fund its operations; it's liquidity situation may be stressed

Debt-Equity Ratio

Inventory Turnover Ratio

Lowest at 4.4 times

in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling inventory has slowed

Inventory Turnover Ratio

Debtors Turnover Ratio

Lowest at 5.88 times

in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling Debtors has slowed

Debtors Turnover Ratio