A. O. Smith Corporation (AOS) vs Gates Industrial Corporation PLC (GTES)

A. O. Smith Corporation and Gates Industrial Corporation PLC are both Specialty Industrial Machinery companies. A. O. Smith Corporation is the larger, with a market value of $8.9B against $5.9B — 1.5× the size. Gates Industrial Corporation PLC trades at the lower P/E: 16.3× against 18.5×. Gates Industrial Corporation PLC grew revenue faster over the last twelve months: 3.98% against −0.71%. A. O. Smith Corporation has the higher net margin (13.0% vs 10.4%) and the higher return on invested capital (19.1% vs 5.56%). Across the 22 metrics below, A. O. Smith Corporation leads on 11 and Gates Industrial Corporation PLC on 11.

Valuation

Metric AOS GTES Specialty Industrial Machinery median
P/E 18.46 16.34 25.64
P/S 2.36 1.69 2.81
P/B 4.93 1.52 2.99
Price to free cash flow 15.99 17.36 23.82
EV/EBITDA 11.99 10.57 15.15
EV/Sales 2.48 2.10 2.77
Earnings yield 5.42% 6.12% 3.07%
Free cash flow yield 6.25% 5.76% 3.67%

Profitability

Metric AOS GTES Specialty Industrial Machinery median
Gross margin 38.62% 40.33% 35.46%
Operating margin 18.17% 13.54% 10.04%
Net margin 13.01% 10.37% 7.24%
Free cash flow margin 14.77% 9.71% 9.04%
Return on equity 26.97% 9.62% 10.73%
Return on assets 14.49% 5.05% 4.51%
Return on invested capital 19.09% 5.56% 5.00%

Growth

Metric AOS GTES Specialty Industrial Machinery median
Revenue growth (TTM) (0.71%) 3.98% 6.59%
EPS growth (last fiscal year) 6.06% 29.73% 5.97%
Revenue growth, 5-year CAGR 5.76% 4.27% 8.53%
Net income growth, 5-year CAGR 9.63% 25.92% 6.58%

Health

Metric AOS GTES Specialty Industrial Machinery median
Debt to equity 0.37 0.58 0.33
Current ratio 1.64 3.41 2.08
Net debt to EBITDA (0.05) 2.18 1.32

Dividend

Metric AOS GTES Specialty Industrial Machinery median
Dividend yield 2.20% — 1.11%
Payout ratio 0.41 — 0.31

Size

Metric AOS GTES Specialty Industrial Machinery median
Market cap 8.94b 5.92b 2.19b

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