A. O. Smith Corporation (AOS) vs Watts Water Technologies, Inc. (WTS)

A. O. Smith Corporation and Watts Water Technologies, Inc. are both Specialty Industrial Machinery companies. Watts Water Technologies, Inc. is the larger, with a market value of $11.9B against $8.1B — 1.5× the size. A. O. Smith Corporation trades at the lower P/E: 16.5× against 31.1×. Watts Water Technologies, Inc. grew revenue faster over the last twelve months: 17.1% against 0.39%. Watts Water Technologies, Inc. has the higher net margin (14.3% vs 13.2%) and the lower return on invested capital (16.4% vs 18.8%). Both pay a dividend; A. O. Smith Corporation yields more (2.43% vs 0.64%). Across the 23 metrics below, A. O. Smith Corporation leads on 13 and Watts Water Technologies, Inc. on 10.

Valuation

Metric AOS WTS Specialty Industrial Machinery median
P/E 16.45 31.15 28.39
P/S 2.13 4.46 2.70
P/B 4.41 5.46 3.02
Price to free cash flow 12.70 34.51 23.32
EV/EBITDA 10.95 20.52 15.39
EV/Sales 2.25 4.40 2.81
Earnings yield 6.08% 3.21% 3.12%
Free cash flow yield 7.87% 2.90% 3.24%

Profitability

Metric AOS WTS Specialty Industrial Machinery median
Gross margin 38.59% 48.85% 35.90%
Operating margin 18.17% 19.13% 11.22%
Net margin 13.15% 14.34% 7.80%
Free cash flow margin 16.80% 13.05% 9.51%
Return on equity 27.13% 18.81% 10.50%
Return on assets 14.52% 13.72% 4.60%
Return on invested capital 18.80% 16.42% 5.36%

Growth

Metric AOS WTS Specialty Industrial Machinery median
Revenue growth (TTM) 0.39% 17.13% 6.45%
EPS growth (last fiscal year) 6.06% 17.03% 4.97%
Revenue growth, 5-year CAGR 5.76% 10.08% 8.31%
Net income growth, 5-year CAGR 9.63% 24.42% 5.04%

Health

Metric AOS WTS Specialty Industrial Machinery median
Debt to equity 0.35 0.05 0.35
Current ratio 1.59 2.66 2.11
Net debt to EBITDA (0.05) (0.41) 1.32

Dividend

Metric AOS WTS Specialty Industrial Machinery median
Dividend yield 2.43% 0.64% 1.10%
Payout ratio 0.40 0.20 0.31

Size

Metric AOS WTS Specialty Industrial Machinery median
Market cap 8.08b 11.85b 1.91b

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