Fundamental analysis: A. O. Smith Corporation (AOS)

Awarener score: 7.2

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Very good), the business stability (Good) and growth (Lacking), and the company's inclination to return cash to the stockholders (Superb).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 5.5

Business has been slightly shrinking. It's been similar to peer companies.
A. O. Smith Corporation business trend stability is good. The higher the stability, the lower the risk. It looks somewhat better than rivals.

Margins score: 7.5

AOS profit margins -on goods and services sold- are usually sufficient. They stand somewhat better than rival companies.
Business profit on sales tends to be very good. It's more than average in relation to competitors.
Profits on sales made -available to repay debt and purchase properties- are usually good. They remain a slight improvement compared to peers.
Earnings -before income taxes and interests on loans taken- tend to be very good in relation to total revenues. They're still well ranked against similar companies.
Profits -before income taxes- are usually very good considering total sales, and remain more than average in relation to rivals.
Total net profit tends to be very good when confronted to sales. Company stands more than average in relation to comparable firms.

Growth score: 2.1

A. O. Smith Corporation profit growth -on goods and services sold- has been almost stagnant. It's been in a weak position compared to competitors.
In recent years, earnings -on operations- have been shrinking, which has been worse than most comparable firms.
Profits -available to repay debt and purchase properties- tended to shrink, which compares substantially worse when measured against peer enterprises.
Earnings -before income taxes and interests on loans taken- tended to shrink. It turns to be in a very weak position compared to similar stocks.
In past years, profits -before income taxes- tended to shrink. It was worse than most rivals.
In the previous years, growth on total net profit has been negative, and substantially worse when measured against peer companies.
Earnings per share have been shrinking in the past years. It's been in a very weak position compared to industry peers.

Miscellaneous score: 6.0

AOS had to pay sparse income taxes in relation to profits made in the past years. It's been somewhat better than peers.
The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 9.8

A. O. Smith Corporation usually gets huge returns on the resources it controls. It proves great when measured against peer firms.
The company normally gets huge proceeds -on the resources directly invested in the business-. They remain impressive in relation to similar companies.
There's usually excellent profitability -in relation to owned resources-. It ranks great when measured against competitors.
In the past, got huge returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's more than average in relation to comparable enterprises.

Usage of Funds score: 6.8

AOS usually uses a sparse portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is modest. It stands more than average in relation to rival firms.
The company is usually replacing the property, plant, and equipment that gets old, keeping its operating capabilities up to date, which is more than average in relation to industry peers.
In the past twelve months it paid run-of-the-mill dividends, considering the current stock price. It came well ranked against competitors.
Has increased dividend payments in the past years. Business prospects may have improved. The company has behaved in good shape compared to similar firms.
The company usually uses some portion of genuine funds generated to pay dividends. Dividend payments should be safe, unless business prospects take a nosedive. Sustainability looks slightly worse than comparable companies.
The company usually significantly reduces the pool of investors, resulting in fewer mouths feeding on the pie of profits. It remains impressive in relation to peer enterprises.
Repurchase effectiveness metric is very complex. Run again in analytical mode if you 're interested in a technical explanation. It stands excellent in relation to rivals.
The company uses a large portion of genuine fund generation to reward investors, which can probably be sustained for as long as business doesn't turn sour. It still looks below average when measured against competitors.

Balance Sheet score: 6.1

A. O. Smith Corporation intangible assets (like brands and goodwill) represent a portion of resources controlled, according to accounting books. There could be difficulties in liquidating them if the company ever gets in financial distress. It happens to be similar to peer companies.
The company has roughly double short-term resources than short-term obligations. Liquidity concerns are normally not an issue. It turns to be lacking compared to similar firms.
A very minor portion of resources controlled were provided for with financial debt. Financial strength is solid. Company could increase debt if it wished so, to reinvest in business, to buy a smaller company or to reward stockholders. It remains well ranked against rival firms.
Controlled resources can be made into cash within reason, which is quite good for liquidity. It looks similar to rivals.
For every dollar of short-term obligations, the company has enough dollars in cash and short-term receivables. It's a slight improvement compared to peer firms.
For every dollar of short-term obligations, the company has almost another of cash and equivalents, which is somewhat better than similar enterprises.
Usually, sales are on a two-months credit. It still ranks similar to peers.
Normally has approximately three months of sales worth in inventory. It comes up as in good shape compared to competitors.
On average, it takes higher than five months from the purchase to charging customers. It happens to be well ranked against peers.
On average pays suppliers approximately three months after the purchase. It ranks great when measured against industry peers.
The company pays its suppliers roughly two months before charging its customers, so there's some money invested in working capital. It's excellent in relation to similar companies.
Net interest expenses consume a non-significant portion of usual business earnings, and are therefore extremely easily to bear. It stands well ranked against rival firms.
Business earnings have usually been excellent when measured against loans taken. It could take less than two years to repay the obligations with current profitability. It ranks top tier when measured against comparable enterprises.
Revenues are quite good in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. The more property, plant, and equipment used, the more the company must reinvest to fight obsolescence, which usually means less available funds for the shareholders in the long run. It looks close to average when compared to similar firms.
Resource exploitation is excellent when yearly sales are considered. This metric is normally tied to the industry where the firm belongs. It's still better than most peer companies.

Valuation score: 5.7

A. O. Smith Corporation looks very expensive in relation to profits and financial position. It happens to be below average when measured against competitors.
Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains lacking compared to peers.
In the past twelve months, the company generated some good free funds in relation to the stock price, which stands better than most similar companies.
The company usually generates more than enough genuine funds to cover up for its business needs. Surplus cash may be used to repay loans, to eventually buy new businesses, or to reward investors. Considering the financial position and stock price, at the current price the share might be interesting. It's still great when measured against industry firms.
In the past twelve months, the company has significantly rewarded investors, considering both dividends and share on the pie of earnings. It came up impressive in relation to peer ventures.
The company has more cash than debt. It might be poised to increase stockholder payments, or to fund new business projects. It looks well ranked against similar enterprises.
Considering the past twelve months, traditional Price-to-Earnings relation is very high. A lot of improvement expectations are already in the stock price, which is risky. It ranks weak when measured against peer companies.
Comparing the current stock price with the past twelve-months revenues gives a high relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks in a weak position compared to rival firms.
The relation between the stock price and accounting book value is really high, which may be good or bad depending on context. Run again in analytic mode if you want to dig deeper. The company remains mediocre against peer firms.
In the past twelve months, the operating business earned little money when compared to the current stock price and financial position. It happens to be below average when measured against industry peers.
In an alternate metric of bang for the buck, the company has usually shown a good earnings power ability when measured against the current stock price and financial position. It's still a slight improvement compared to peer companies.

Total score: 6.2

Company at a glance: A. O. Smith Corporation (AOS)

Sector, industry: Industrials, Specialty Industrial Machinery

Market Cap: 10.29 billions

Revenues TTM: 3.74 billions

A. O. Smith Corporation manufactures and markets residential and commercial gas, heat pump 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; commercial boilers for hospitals, schools, hotels, and other large commercial buildings, as well as residential boilers for homes, apartments, and condominiums; and water treatment products comprising point-of-entry water softeners, well water solutions, and whole-home water filtration products, on-the-go filtration bottles, point-of-use carbon, and reverse osmosis 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, electric wall-hung, gas tankless, combi-boiler, heat pump and solar water heaters. The company offers its products primarily under the A. O. Smith, State, Lochinvar, and water softener 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.