A. O. Smith Corporation (AOS) Valuation

Valuation

Model-based estimates, not advice. The DCF is the discounted-cash-flow value per share; compare it with the price, not as a target.

DCF fair value

+28.4%

$83.76

vs $65.24 price

Levered DCF

$58.02

After debt service

Piotroski score

7 / 9

Strong

Altman Z-score

6.23

Safe zone

Rating

Overall 4 / 5

Ratios by fiscal year

Margins and yields are shares of revenue, equity or price; multiples are ×.

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
P/E	17.33×	18.69×	22.22×	37.66×	28.15×	25.62×	21.27×	16.42×
P/B	5.04×	5.32×	6.7×	5.07×	7.49×	4.79×	4.73×	4.18×
P/S	2.44×	2.63×	3.21×	2.36×	3.88×	3.06×	2.63×	2.25×
EV / EBITDA	11.51×	12.72×	14.78×	28.5×	19.08×	15.87×	13.95×	11.19×
Gross margin	38.8%	38.1%	38.5%	35.4%	37.0%	38.3%	39.5%	41.0%
Operating margin	19.0%	18.8%	19.7%	17.5%	17.2%	15.4%	15.6%	17.3%
Net margin	14.3%	14.0%	14.4%	6.3%	13.8%	11.9%	12.4%	13.9%
Current ratio	1.5×	1.55×	1.59×	1.75×	1.57×	1.83×	1.96×	2.09×
Debt / equity	0.1×	0.12×	0.08×	0.21×	0.12×	0.08×	0.19×	0.13×
Interest coverage	53.93×	106.99×	63.12×	70.07×	141.74×	61.12×	42.44×	65.68×
Dividend yield	2.1%	1.9%	1.5%	2.0%	1.2%	1.8%	1.9%	1.8%
Payout ratio	35.8%	35.7%	33.0%	75.2%	34.9%	46.0%	40.3%	29.3%

Key metrics by fiscal year

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
Return on equity	29.4%	28.3%	30.2%	13.5%	26.6%	18.7%	22.2%	25.9%
Return on invested capital	23.9%	23.2%	25.2%	27.4%	20.1%	15.2%	15.9%	19.2%
Return on assets	17.4%	16.5%	17.3%	7.1%	14.0%	10.9%	12.1%	14.5%
Free cash flow yield	5.8%	4.7%	4.8%	3.6%	4.1%	5.7%	5.0%	5.1%
Earnings yield	5.8%	5.3%	4.5%	2.7%	3.5%	3.9%	4.7%	6.2%
Enterprise value	$9.4B	$10B	$12.2B	$8.8B	$13.5B	$8.4B	$7.8B	$7.1B
Net debt / EBITDA	0.02×	-0.03×	-0.22×	-0.08×	-0.32×	-0.8×	-0.09×	-0.06×
Cash conversion cycle (days)	52	43	41	40	17	13	30	28