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Here's Why Investors Should Retain A. O. Smith (AOS) Stock (Revised)
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A. O. Smith Corporation (AOS - Free Report) is benefitting from robust demand for condensing boilers owing to its focus on innovation and decarbonization efforts. Despite high raw material, transportation costs, and supply-chain constraints, pricing actions are driving AOS’ North American boiler revenues. Price increases have driven its North American water treatment business. Robust demand for water heating and water treating products is driving sales from India within its Rest of the World segment.
A. O. Smith’s ability to penetrate different markets through acquisitions is commendable. It acquired Atlantic Filter in June 2022 which 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 AOS’ commercial and water heater offerings. In third-quarter 2022, the Giant Factories acquisition added $25 million to the company’s North American sales.
The company utilizes its cash flow to reward its shareholders through dividend payouts and share-repurchase programs. In the first nine months of 2022, the company paid dividends worth $131.1 million (up 4.5% year over year) and repurchased 4.5 million shares for $282 million (up 33% year over year). The quarterly dividend rate also hiked 7% to 30 cents per share in October 2022.
Considering the above-mentioned positives, we believe, investors should retain AOS stock for now, as suggested by its current Zacks Rank #3 (Hold). In the past six months, the stock has increased 9.9%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked companies from the Industrial Products sector are discussed below:
AIT’s earnings estimates have increased 4.6% for fiscal 2023 in the past 60 days. Shares of Applied Industrial have risen 37.9% in the past six months.
MRC Global Inc. (MRC - Free Report) presently has a Zacks Rank of 1. MRC’s earnings surprise in the last four quarters was 103%, on average.
In the past 60 days, MRC Global’s earnings estimates have increased 16.2% for 2022. The stock has rallied 22.2% in the past six months.
EnerSys (ENS - Free Report) delivered an average four-quarter earnings surprise of 2.1%. ENS presently carries a Zacks Rank of 2 (Buy).
ENS’ earnings estimates have increased 0.6% for fiscal 2023 (ending March 2023) in the past 60 days. The stock has gained 33.6% in the past six months.
(We are reissuing this article to correct a mistake. The original article, issued on December 14, 2022, should no longer be relied upon.)
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Here's Why Investors Should Retain A. O. Smith (AOS) Stock (Revised)
A. O. Smith Corporation (AOS - Free Report) is benefitting from robust demand for condensing boilers owing to its focus on innovation and decarbonization efforts. Despite high raw material, transportation costs, and supply-chain constraints, pricing actions are driving AOS’ North American boiler revenues. Price increases have driven its North American water treatment business. Robust demand for water heating and water treating products is driving sales from India within its Rest of the World segment.
A. O. Smith’s ability to penetrate different markets through acquisitions is commendable. It acquired Atlantic Filter in June 2022 which 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 AOS’ commercial and water heater offerings. In third-quarter 2022, the Giant Factories acquisition added $25 million to the company’s North American sales.
The company utilizes its cash flow to reward its shareholders through dividend payouts and share-repurchase programs. In the first nine months of 2022, the company paid dividends worth $131.1 million (up 4.5% year over year) and repurchased 4.5 million shares for $282 million (up 33% year over year). The quarterly dividend rate also hiked 7% to 30 cents per share in October 2022.
Considering the above-mentioned positives, we believe, investors should retain AOS stock for now, as suggested by its current Zacks Rank #3 (Hold). In the past six months, the stock has increased 9.9%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked companies from the Industrial Products sector are discussed below:
Applied Industrial Technologies, Inc. (AIT - Free Report) presently sports a Zacks Rank #1 (Strong Buy) and has a trailing four-quarter earnings surprise of 24.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
AIT’s earnings estimates have increased 4.6% for fiscal 2023 in the past 60 days. Shares of Applied Industrial have risen 37.9% in the past six months.
MRC Global Inc. (MRC - Free Report) presently has a Zacks Rank of 1. MRC’s earnings surprise in the last four quarters was 103%, on average.
In the past 60 days, MRC Global’s earnings estimates have increased 16.2% for 2022. The stock has rallied 22.2% in the past six months.
EnerSys (ENS - Free Report) delivered an average four-quarter earnings surprise of 2.1%. ENS presently carries a Zacks Rank of 2 (Buy).
ENS’ earnings estimates have increased 0.6% for fiscal 2023 (ending March 2023) in the past 60 days. The stock has gained 33.6% in the past six months.
(We are reissuing this article to correct a mistake. The original article, issued on December 14, 2022, should no longer be relied upon.)