A. O. Smith Corporation

AOS

Industrial - Machinery · Industrials

Also trades as: 0L7A.L

Price

$62.69

-0.97 (-1.53%)

Market Cap

$8.69B

Winston Score

Winston is curious

Mixed quality — meaningful strengths and weaknesses.

Data as of Aug 12, 2026 · filings through Jun 30, 2026

Share count falling — buybacks

−13.3% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 161.3M (2021) → 139.9M (2025)

A. O. Smith makes water heaters and water treatment products for homes and businesses. Its main products include residential and commercial water heaters, boilers, and water purification systems. The company is one of the largest water heater manufacturers in North America and has a strong presence in China, where it sells directly to consumers.

A. O. Smith earns money by selling hardware — water heaters and filtration units — through plumbers, contractors, retailers, and distributors. It operates primarily in the United States, Canada, China, and India, generating roughly $3.5 billion in annual revenue. Its moat comes from brand recognition, a large installer network, and the fact that water heaters are a necessity that must be replaced every 8–12 years. The key risk is its significant exposure to China, where slowing construction activity and weaker consumer spending have pressured sales in recent years.

Winston Score History

Politician Trades

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2 Congressional buys and 3 sells on AOS in the last 12 months.

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

-0.7% YoY

YoY Growth Rate

Revenue declining

EPS Growth

-15.9% YoY

YoY Growth Rate

Earnings declining

R&D Spend

$0/ year

↓ Declining (-100% vs prior year)

0.0% of revenue

Below sector average (4%)

R&D spend declining — could signal cost-cutting or efficiency

Insider Activity

21.0%ownership

↑ Rising

Insiders increasing their stake — aligned with shareholders

Cash Position

Cash flow positive

$181M cash & investments

Quarterly Free Cash Flow

↓ Burn rate worsening

Company generates more cash than it spends — no dilution risk from fundraising

Revenue declining

A. O. Smith Corporation's revenue is actually shrinking. In a growth stock, that removes the core investment thesis. The low Winston Score here may be warranted — unless there's a turnaround story.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

Each metric is explained in plain language so you know exactly what you're looking at. Start your free trial now.

Quality

Gross Margin

38.6%

Modest — 38.6% gross margin

Operating Margin

16.7%

Healthy — 16.7% operating margin

ROCE

6.0%

Weak — 6.0% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales YoY

+0.4%

Nearly flat sales (+0.4% YoY)

EPS YoY

-0.3%

Earnings shrinking (-0.3% YoY)

Slight earnings drop. Typical near a cyclical low.

EPS Consistency

2/8 quarters

Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion

138%

Turns 138% of profit into real cash

FCF Margin

16.8%

Converts sales into free cash efficiently (16.8%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

Debt / Equity

0.32

Conservative — low debt load (0.32)

Interest Cover

31.54x

Comfortably covers interest (31.5x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

17.5x

Fair value — P/E 17.5

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

P/E vs Forward

+4.2

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (17.5 → 13.3)

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Dividends

Dividend Yield

2.44%

Moderate income — 2.44% yield

Standard yield zone for stable dividend payers. A meaningful piece of total return.

Dividend Growth

+5.9%

Dividend growing modestly (5.9% YoY)

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