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 $7.8B against $6.7B — 1.2× the size. A. O. Smith Corporation trades at the lower P/E: 16.3× against 18.9×. Gates Industrial Corporation PLC grew revenue faster over the last twelve months: 3.34% against 0.39%. A. O. Smith Corporation has the higher net margin (13.2% vs 10.4%) and the higher return on invested capital (18.8% vs 5.42%). Across the 22 metrics below, A. O. Smith Corporation leads on 15 and Gates Industrial Corporation PLC on 7.

Valuation

Metric AOS GTES Specialty Industrial Machinery median
P/E 16.29 18.92 29.62
P/S 2.11 1.94 2.77
P/B 4.37 1.75 3.04
Price to free cash flow 12.58 17.93 23.81
EV/EBITDA 10.85 12.06 16.05
EV/Sales 2.23 2.36 2.94
Earnings yield 6.14% 5.29% 3.08%
Free cash flow yield 7.95% 5.58% 3.12%

Profitability

Metric AOS GTES Specialty Industrial Machinery median
Gross margin 38.59% 39.69% 35.90%
Operating margin 18.17% 13.27% 11.22%
Net margin 13.15% 10.37% 7.80%
Free cash flow margin 16.80% 10.84% 9.51%
Return on equity 27.13% 9.69% 11.10%
Return on assets 14.52% 4.98% 4.63%
Return on invested capital 18.80% 5.42% 5.37%

Growth

Metric AOS GTES Specialty Industrial Machinery median
Revenue growth (TTM) 0.39% 3.34% 6.45%
EPS growth (last fiscal year) 6.06% 29.73% —
Revenue growth, 5-year CAGR 5.76% 4.27% 8.31%
Net income growth, 5-year CAGR 9.63% 25.92% 5.04%

Health

Metric AOS GTES Specialty Industrial Machinery median
Debt to equity 0.35 0.59 0.35
Current ratio 1.59 3.24 2.11
Net debt to EBITDA (0.05) 2.18 1.32

Dividend

Metric AOS GTES Specialty Industrial Machinery median
Dividend yield 1.59% — 1.12%
Payout ratio 0.65 0.00 0.17

Size

Metric AOS GTES Specialty Industrial Machinery median
Market cap 7.84b 6.65b 1.97b

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