A. O. Smith Corporation (AOS) vs Donaldson Company, Inc. (DCI)

A. O. Smith Corporation and Donaldson Company, Inc. are both Specialty Industrial Machinery companies. Donaldson Company, Inc. is the larger, with a market value of $10.0B against $7.8B — 1.3× the size. A. O. Smith Corporation trades at the lower P/E: 16.3× against 22.4×. Donaldson Company, Inc. grew revenue faster over the last twelve months: 5.28% against 0.39%. A. O. Smith Corporation has the higher net margin (13.2% vs 11.7%) and the higher return on invested capital (18.8% vs 13.4%). Both pay a dividend; A. O. Smith Corporation yields more (1.59% vs 1.49%). Across the 23 metrics below, A. O. Smith Corporation leads on 19 and Donaldson Company, Inc. on 4.

Valuation

Metric AOS DCI Specialty Industrial Machinery median
P/E 16.29 22.36 29.62
P/S 2.11 2.61 2.77
P/B 4.37 5.98 3.04
Price to free cash flow 12.58 23.21 23.81
EV/EBITDA 10.85 16.62 16.05
EV/Sales 2.23 2.88 2.94
Earnings yield 6.14% 4.47% 3.08%
Free cash flow yield 7.95% 4.31% 3.12%

Profitability

Metric AOS DCI Specialty Industrial Machinery median
Gross margin 38.59% 34.64% 35.90%
Operating margin 18.17% 15.44% 11.22%
Net margin 13.15% 11.68% 7.80%
Free cash flow margin 16.80% 11.24% 9.51%
Return on equity 27.13% 0.00% 11.10%
Return on assets 14.52% 13.03% 4.63%
Return on invested capital 18.80% 13.42% 5.37%

Growth

Metric AOS DCI Specialty Industrial Machinery median
Revenue growth (TTM) 0.39% 5.28% 6.45%
EPS growth (last fiscal year) 6.06% 26.23% —
Revenue growth, 5-year CAGR 5.76% 6.37% 8.31%
Net income growth, 5-year CAGR 9.63% 9.60% 5.04%

Health

Metric AOS DCI Specialty Industrial Machinery median
Debt to equity 0.35 0.73 0.35
Current ratio 1.59 2.08 2.11
Net debt to EBITDA (0.05) 1.46 1.32

Dividend

Metric AOS DCI Specialty Industrial Machinery median
Dividend yield 1.59% 1.49% 1.12%
Payout ratio 0.65 0.32 0.17

Size

Metric AOS DCI Specialty Industrial Machinery median
Market cap 7.84b 10.04b 1.97b

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