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A. O. Smith Corporation — Intrinsic Value & Fair Price

AOS
NYSEIndustrialsIndustrial - MachineryCIK 0000091142aosmith.comAbout AOS
Last close · Oct 16, 202659.22−0.25 (−0.42%)
Market cap$8.0B
Model value · DCF · Perpetuity growth · 5y
49.64
A. O. Smith closed at $59.22 — overvalued by 19% vs model.
36.28the model's range82.90

DCF · Perpetuity growth · 5y leads for dividend payer — positive operating income and three years of positive free cash flow. From a five-year discounted cash flow.

Other models
24.84 – 84.31
Wall St. target
70.00 15% below
Above model, 1y
5 of 20 days

Price and model value

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What the marks mean
Daily close

Dividends

Quarterly · as of Oct 16, 2026
Yield, trailing 12 months
2.43%
Past 2 years
low 1.41%high 2.60%
Dividends per share, a year at a time
$1.04Jul ’21$1.12Jul ’22$1.20Jul ’23$1.28Jul ’24$1.36Jul ’25$1.44TTM
Dividends / free cash flow, FY2025
35.8%
Raised
14 years in a row
Growth, 5 yrs
6.7% a year
Last change
+5.9% · Oct 2025
Every payment, with ex-dates · latest $0.36, paid Aug 17, 2026

Research on AOS

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How it is valued

Valued asDividend Payer
Revenue declining (~-0% recent)Moderate margins (14% net margin)Pays dividendsHighly cyclical earningsStrong FCF yield (6.8%)
What growth the price implies: the reverse DCF

Key figures

FY2025
P/E
15.4×
EV / EBITDA
10.1×
FCF yield
6.6%
Dividend yield, TTM
2.43%
Beta
1.11
Cost of capital (WACC)
9.48%
Full financials

Analyst actions

third-party, quoted
07-31Stifel Nicolaus · target70.00
07-20Stifel Nicolaus · target76.00
06-10Oppenheimer · target75.00
05-15JP Morgan · “Underweight” from “Neutral”downgrade
Ratings, targets and estimates

Comparable companies

by business, not by industry label
2 more companies list AOS as a comparable

The weekly

One email a week across every stock we cover: 13F filings, insider trades, earnings and new research. It covers the whole market, not just AOS. No account.

About A. O. Smith

A. O. Smith Corporation (AOS) is a global manufacturer and marketer specializing in a comprehensive array of water heating and treatment solutions. Its operations span North America, China, Europe, and India, organized into two primary geographic segments: North America and Rest of World. The company's product portfolio is extensive, featuring residential and commercial water heaters (gas, heat pump, and electric models), boilers, storage tanks, and various water treatment systems. These products cater to a wide range of applications, including homes, apartments, and condominiums, as well as commercial entities such as restaurants, hotels, office buildings, laundries, car washes, small businesses, hospitals, and schools. Specific offerings include diverse water treatment products like point-of-entry water softeners, well water purification systems, whole-home filtration units, portable filtration bottles, point-of-use carbon filters, and reverse osmosis systems, designed for residential, restaurant, hotel, and office use. A. O. Smith also supplies food and beverage filtration products, expansion tanks, commercial solar water heating installations, and heaters for swimming pools and spas, along with associated components. Advanced heating solutions further encompass heat pumps, electric wall-hung units, gas tankless heaters, combi-boilers, and integrated heat pump and solar water heaters. Products are primarily sold under established brands such as A. O. Smith, State, and Lochinvar, in addition to specialized water softener brands. The company leverages various distribution channels, including independent wholesale plumbing distributors, retail outlets like hardware and home center chains, and manufacturer representative firms. Its Aquasana-branded products are sold directly to consumers through e-commerce platforms and other online retailers. Founded in 1874, A. O. Smith Corporation maintains its corporate headquarters in Milwaukee, Wisconsin.

CEO
Stephen Shafer
Headquarters
Milwaukee, WI
Employees
11,500
IPO
1983-09-30
Full company profile

Model estimates for research reference only, not investment advice. Every model rests on assumptions that may not match what happens; the formulas are in how we value a stock.