A Business at a Glance
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ITEM 1 – BUSINESS As used in this annual report on Form 10-K, references to the “Company,” “A. O. Smith,” “AOS,” “we,” “us,” and “our” refer to A. O. Smith and its consolidated subsidiaries. The following discussion should be read in conjunction with our consolidated financial statements and notes thereto under “Item 8 Financial Statements and Supplementary Data” in this annual report on Form 10-K. Our company is comprised of two reporting segments: North America and Rest of World. Both segments manufacture and market comprehensive lines of residential and commercial gas and electric water heaters, boilers, heat pumps, tanks and water treatment products. Both segments primarily manufacture and market in their respective regions of the world. Our Rest of World segment is primarily comprised of China, India, and Europe. NORTH AMERICA Sales in our North America segment accounted for approximately 78 percent of our total sales in 2025.
| Metric | TTM | FY2025 | FY2024 | FY2023 | FY2022 | FY2021 |
|---|---|---|---|---|---|---|
| Revenue | 3.8B | 3.8B | 3.8B | 3.9B | 3.8B | 3.5B |
| Net Income | 546M | 546M | 534M | 557M | 236M | 487M |
| EPS | $3.85 | $3.85 | $3.63 | $3.69 | $1.51 | $3.02 |
| Free Cash Flow | 546M | 546M | 474M | 598M | 321M | 566M |
| ROIC | 29.5% | 30.3% | 31.3% | 34.7% | 23.8% | 39.3% |
| Gross Margin | 38.8% | 38.8% | 38.1% | 38.5% | 35.4% | 37.0% |
| Debt/Equity | 0.11 | 0.11 | 0.12 | 0.09 | 0.22 | 0.13 |
| Dividends/Share | $1.38 | $1.38 | $1.30 | $1.22 | $1.14 | $1.06 |
| Operating Income | 729M | 729M | 708M | 746M | 362M | 682M |
| Operating Margin | 19.0% | 19.0% | 18.5% | 19.3% | 9.6% | 19.3% |
| ROE | 29.4% | 29.2% | 28.6% | 31.0% | 13.2% | 26.5% |
| Shares Outstanding | 142M | 142M | 147M | 151M | 156M | 161M |
SMITH A O CORP passes 7 of 9 quality checks, indicating strong fundamentals.
SMITH A O CORP trades at 17.4x trailing earnings, compared to its 15-year median P/E of 21.8x, suggesting it is currently Fair relative to its historical range. On a free-cash-flow basis, the stock trades at 3.2x vs a median of 19.9x. The company's 5-year average ROIC is 31.9% with a gross margin of 37.6%. Total shareholder yield (dividends + buybacks) is 6.3%. At current prices, the estimated annualized return to fair value is +46.6%.
SMITH A O CORP (AOS) has a current P/E ratio of 17.4, compared to its historical median P/E of 21.8. The stock is currently considered Fair based on its historical valuation range.
SMITH A O CORP (AOS) has a 5-year average return on invested capital (ROIC) of 31.9%. This indicates strong capital allocation and a potential competitive advantage.
SMITH A O CORP (AOS) has a market capitalization of $9.5B. It is classified as a mid-cap stock.
Yes, SMITH A O CORP (AOS) pays a dividend with a trailing twelve-month yield of 2.05%. The company also returns capital through share buybacks, with a buyback yield of 4.21%.
Based on historical P/E analysis, SMITH A O CORP (AOS) appears fair. The current P/E of 17.4 is 20% below its historical median of 21.8. The estimated fair value CAGR (P/E method) is 10.4%.
SMITH A O CORP (AOS) operates in the Household Appliances industry, within the Industrials sector.
SMITH A O CORP (AOS) reported annual revenue of $3.8 billion in its most recent fiscal year, based on SEC EDGAR filings.
SMITH A O CORP (AOS) has a net profit margin of 14.3%. This is a healthy margin.
SMITH A O CORP (AOS) generated $546 million in free cash flow in its most recent fiscal year. Positive free cash flow supports dividends, buybacks, and debt reduction.
SMITH A O CORP (AOS) has a debt-to-equity ratio of 0.11. This indicates a conservatively financed balance sheet.
SMITH A O CORP (AOS) reported earnings per share (EPS) of $3.85 in its most recent fiscal year.
SMITH A O CORP (AOS) has a return on equity (ROE) of 29.2%. This indicates the company generates strong returns for shareholders.
SMITH A O CORP (AOS) has a 5-year average gross margin of 37.6%. This indicates decent pricing power.
The Ledger Terminal provides 18 years of financial data for SMITH A O CORP (AOS), sourced directly from SEC EDGAR filings. This includes income statements, balance sheets, cash flow statements, and key financial ratios.
SMITH A O CORP (AOS) has a book value per share of $13.10, based on its most recent annual SEC filing.
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