Yahoo Finance Here's Why A. O. Smith (AOS) Stock is Up 39.8% in 6 Months
A. O. Smith Corporation AOS shares have gained 34.1% in the past six months compared with the industry’s 17.4% growth.
Let’s look into the factors driving the company’s performance.
What’s Aiding AOS?
A. O. Smith’s North America segment is benefiting from the demand for commercial and residential boilers, and water treatment products. Price increases are also aiding the segment. Strong demand for water heating and water treating products in India is driving sales for the Rest of the World segment.
A. O. Smith believes in adding complementary businesses to its portfolio via acquisitions. Its Atlantic Filter acquisition (June 2022) boosted its position in the water treatment industry and strengthened its customer base in Florida and the adjacent regions. The Canada-based Giant Factories, Inc. buyout in October 2021 expanded the company’s commercial and water heater offerings. The Giant Factories acquisition contributed $94 million to the company’s North American sales in the fourth quarter of 2022.
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Also, A. O. Smith has a sound liquidity position. At the end of the fourth quarter, the company had cash and cash equivalents of $391.2 million. The company had no current debt in the quarter. This implies that the company has sufficient cash to meet its current debt obligations.
AOS also utilizes its cash flow to reward its shareholders through dividend payouts and share-repurchase programs. In 2022, A. O. Smith paid out dividends worth $177.2 million (up 4.2% year over year) and repurchased 6.6 million shares for $403.5 million (up 10.1% year over year). In October 2022, the company hiked its quarterly dividend rate by 7% to 30 cents per share.
Zacks Rank and Other Stocks to Consider
AOS currently carries a Zacks Rank #2 (Buy). Some other top-ranked companies from the Industrial Products sector are discussed below:
Deere & Company DE presently sports a Zacks Rank #1 (Strong Buy). DE’s earnings surprise in the last four quarters was 4.7%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
In the past 60 days, estimates for Deere & Company’s fiscal 2023 earnings have increased 8.6%. The stock has rallied 20.1% in the past six months.
Alamo Group Inc. ALG presently sports a Zacks Rank of 1. ALG’s earnings surprise in the last four quarters was 6.0%, on average.
In the past 60 days, estimates for Alamo’s fiscal 2023 earnings have increased 7.5%. The stock has gained 47.9% in the past six months.
Allegion plc ALLE presently carries a Zacks Rank of 2. ALLE’s earnings surprise in the last four quarters was 10.3%, on average.
In the past 60 days, estimates for Allegion’s fiscal 2023 earnings have increased 3.9%. The stock has gained 17.1% in the past six months.
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Deere & Company (DE) : Free Stock Analysis Report
A. O. Smith Corporation (AOS) : Free Stock Analysis Report
Alamo Group, Inc. (ALG) : Free Stock Analysis Report
Allegion PLC (ALLE) : Free Stock Analysis Report
