A. O. Smith (NYSE:AOS) Upgraded to Hold by Zacks Investment Research

Zacks Investment Research upgraded shares of A. O. Smith (NYSE:AOS) from a sell rating to a hold rating in a research report sent to investors on Thursday, January 11th.

According to Zacks, “Over the past six months, A.O. Smith’s stock has outperformed the industry average. The company also has an impressive earnings surprise history, having beaten estimates thrice over the four trailing quarters.  A flourishing water heater industry, robust consumer product demand in China and positive industry trends are likely to drive top-line growth, going forward. Also, acquisition of residential water treatment firm, Aquasana, looks promising. However, on the flip side, appreciation in steel prices is expected to put margins under pressure. Moreover, transition of the Chinese economy to a consumer driven one has resulted in a significant slowdown that might impact the company’s sales in the region.  Also, strong competition in the water boilers and heaters industry compounds the company’s challenges.”

Other research analysts also recently issued research reports about the stock. Stifel Nicolaus reiterated a hold rating and issued a $59.00 target price on shares of A. O. Smith in a report on Monday, December 11th. Robert W. Baird reiterated a buy rating and issued a $68.00 target price on shares of A. O. Smith in a report on Friday, October 27th. Boenning Scattergood downgraded shares of A. O. Smith from an outperform rating to a neutral rating in a report on Wednesday, October 25th. Finally, SunTrust Banks restated a buy rating and set a $65.00 price objective on shares of A. O. Smith in a report on Thursday, October 12th. Five research analysts have rated the stock with a hold rating and four have given a buy rating to the stock. The company presently has an average rating of Hold and an average target price of $67.83.

Shares of A. O. Smith (NYSE AOS) traded down $3.08 during trading hours on Thursday, hitting $61.56. 1,534,245 shares of the company’s stock were exchanged, compared to its average volume of 1,107,302. The firm has a market cap of $11,113.43, a price-to-earnings ratio of 36.21, a P/E/G ratio of 1.89 and a beta of 1.53. A. O. Smith has a 52 week low of $48.92 and a 52 week high of $68.39. The company has a quick ratio of 1.87, a current ratio of 2.24 and a debt-to-equity ratio of 0.24.

A. O. Smith (NYSE:AOS) last released its quarterly earnings results on Tuesday, January 30th. The industrial products company reported $0.60 earnings per share for the quarter, beating analysts’ consensus estimates of $0.56 by $0.04. The business had revenue of $768.60 million for the quarter, compared to the consensus estimate of $767.45 million. A. O. Smith had a net margin of 9.89% and a return on equity of 23.30%. A. O. Smith’s revenue for the quarter was up 10.1% on a year-over-year basis. During the same quarter last year, the firm earned $0.47 EPS. sell-side analysts expect that A. O. Smith will post 2.57 earnings per share for the current year.

The firm also recently announced a quarterly dividend, which will be paid on Thursday, February 15th. Stockholders of record on Wednesday, January 31st will be given a dividend of $0.18 per share. This is a positive change from A. O. Smith’s previous quarterly dividend of $0.14. This represents a $0.72 annualized dividend and a dividend yield of 1.17%. The ex-dividend date of this dividend is Tuesday, January 30th. A. O. Smith’s payout ratio is 42.35%.

In other A. O. Smith news, insider Peter R. Martineau sold 9,723 shares of the business’s stock in a transaction dated Friday, November 17th. The shares were sold at an average price of $59.02, for a total value of $573,851.46. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Also, Chairman Ajita G. Rajendra sold 3,610 shares of the business’s stock in a transaction dated Thursday, November 30th. The shares were sold at an average price of $62.74, for a total transaction of $226,491.40. The disclosure for this sale can be found here. Over the last quarter, insiders have sold 86,151 shares of company stock worth $5,384,359. 1.27% of the stock is owned by company insiders.

Several hedge funds have recently made changes to their positions in the company. Public Employees Retirement Association of Colorado lifted its position in shares of A. O. Smith by 3.2% during the fourth quarter. Public Employees Retirement Association of Colorado now owns 29,583 shares of the industrial products company’s stock worth $1,813,000 after purchasing an additional 916 shares in the last quarter. Rockefeller Financial Services Inc. lifted its position in shares of A. O. Smith by 187.5% during the fourth quarter. Rockefeller Financial Services Inc. now owns 56,376 shares of the industrial products company’s stock worth $3,455,000 after purchasing an additional 36,768 shares in the last quarter. US Bancorp DE lifted its position in shares of A. O. Smith by 2.6% during the fourth quarter. US Bancorp DE now owns 58,504 shares of the industrial products company’s stock worth $3,585,000 after purchasing an additional 1,460 shares in the last quarter. Telemus Capital LLC lifted its position in shares of A. O. Smith by 1.9% during the fourth quarter. Telemus Capital LLC now owns 69,355 shares of the industrial products company’s stock worth $4,250,000 after purchasing an additional 1,302 shares in the last quarter. Finally, IFC Holdings Incorporated FL acquired a new position in shares of A. O. Smith during the fourth quarter worth approximately $1,238,000. Institutional investors own 75.19% of the company’s stock.

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About A. O. Smith

A. O. Smith Corporation operates through two segments: North America and Rest of World. The Company’s Rest of World segment primarily consists of China, Europe and India. Both segments manufacture and market comprehensive lines of residential and commercial gas, gas tankless and electric water heaters, as well as water treatment products.

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