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Here's Why A. O. Smith (AOS) Should Grace Your Portfolio Now
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A. O. Smith Corporation (AOS - Free Report) is gaining from improving supply chains and strength in the North America segment. The company’s consistent measures to reward its shareholders hold promise.
Let’s delve deeper to unearth the factors that make this Zacks Rank #2 (Buy) company a smart investment choice.
Business Strength: With improving supply chains, higher shipments augur well for the company’s growth. Robust demand for commercial and residential boilers and water treatment products is driving the company’s North America segment. Price increases are also aiding the segment. A. O. Smith expects North American boiler sales to increase mid-single digits year over year. North American water treatment sales are estimated to increase 5-7% year over year. Strong demand for water heating and water treating products is driving sales from India within the Rest of the World segment.
Expansion Initiatives: A. O. Smith focuses on acquiring complementary businesses to expand its operations. In June 2022, the company acquired Atlantic Filter, boosting its position in the water treatment industry and strengthening its customer base in Florida and the adjacent regions. In 2022, the Giant Factories acquisition added $94 million to North American sales.
Rewards to Shareholders: A. O. Smith has raised its annual dividend for 30 consecutive years. In October 2022, the company hiked its dividend by 7% to 30 cents per share (annually: $1.20). In 2022, the company paid dividends worth $177.2 million, up 4.2% year over year. In the same period, it repurchased 6.6 million shares for $403.5 million, up 10.1% year over year.
In the first quarter, AOS paid dividends of $45.4 million, up 2.7% year over year. It also repurchased 0.8 million shares for $53.1 million. In January 2023, the company’s board boosted the existing share buyback program by authorizing to repurchase an additional 7.5 million shares. For 2023, the company expects to repurchase shares worth approximately $300 million.
Northbound Estimate Revision: The Zacks Consensus Estimate for AOS’ 2023 earnings has been revised upward by 2 cents in the past 60 days.
Price Performance: Shares of A. O. Smith have rallied 26% in the year-to-date period, outperforming the industry’s 12.3% increase.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks worth considering within the broader Industrial Products sector are as follows:
Image: Bigstock
Here's Why A. O. Smith (AOS) Should Grace Your Portfolio Now
A. O. Smith Corporation (AOS - Free Report) is gaining from improving supply chains and strength in the North America segment. The company’s consistent measures to reward its shareholders hold promise.
Let’s delve deeper to unearth the factors that make this Zacks Rank #2 (Buy) company a smart investment choice.
Business Strength: With improving supply chains, higher shipments augur well for the company’s growth. Robust demand for commercial and residential boilers and water treatment products is driving the company’s North America segment. Price increases are also aiding the segment. A. O. Smith expects North American boiler sales to increase mid-single digits year over year. North American water treatment sales are estimated to increase 5-7% year over year. Strong demand for water heating and water treating products is driving sales from India within the Rest of the World segment.
Expansion Initiatives: A. O. Smith focuses on acquiring complementary businesses to expand its operations. In June 2022, the company acquired Atlantic Filter, boosting its position in the water treatment industry and strengthening its customer base in Florida and the adjacent regions. In 2022, the Giant Factories acquisition added $94 million to North American sales.
Rewards to Shareholders: A. O. Smith has raised its annual dividend for 30 consecutive years. In October 2022, the company hiked its dividend by 7% to 30 cents per share (annually: $1.20). In 2022, the company paid dividends worth $177.2 million, up 4.2% year over year. In the same period, it repurchased 6.6 million shares for $403.5 million, up 10.1% year over year.
In the first quarter, AOS paid dividends of $45.4 million, up 2.7% year over year. It also repurchased 0.8 million shares for $53.1 million. In January 2023, the company’s board boosted the existing share buyback program by authorizing to repurchase an additional 7.5 million shares. For 2023, the company expects to repurchase shares worth approximately $300 million.
Northbound Estimate Revision: The Zacks Consensus Estimate for AOS’ 2023 earnings has been revised upward by 2 cents in the past 60 days.
Price Performance: Shares of A. O. Smith have rallied 26% in the year-to-date period, outperforming the industry’s 12.3% increase.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks worth considering within the broader Industrial Products sector are as follows:
Enersys (ENS - Free Report) presently flaunts a Zacks Rank #1 (Strong Buy). The company delivered a trailing four-quarter earnings surprise of 8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
Enersys has an estimated earnings growth rate of 10.5% for the current year. Shares of the company have surged approximately 87% in a year.
Xylem Inc. (XYL - Free Report) currently sports a Zacks Rank #1. The company delivered a trailing four-quarter earnings surprise of 17.7%, on average.
Xylem has an estimated earnings growth rate of 21.7% for the current year. Shares of the company have jumped 45.5% in a year.