Critical Contrast: A. O. Smith (NYSE:AOS) vs. Alfa Laval (ALFVF)

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Alfa Laval (OTCMKTS:ALFVF) and A. O. Smith (NYSE:AOS) are both industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, profitability, institutional ownership, analyst recommendations, dividends and earnings.

Profitability

This table compares Alfa Laval and A. O. Smith’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alfa Laval N/A N/A N/A
A. O. Smith 13.93% 26.00% 14.62%

Dividends

A. O. Smith pays an annual dividend of $0.88 per share and has a dividend yield of 1.6%. Alfa Laval does not pay a dividend. A. O. Smith pays out 33.7% of its earnings in the form of a dividend. A. O. Smith has raised its dividend for 13 consecutive years.

Earnings & Valuation

This table compares Alfa Laval and A. O. Smith’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Alfa Laval N/A N/A N/A N/A N/A
A. O. Smith $3.19 billion 2.96 $444.20 million $2.61 21.27

A. O. Smith has higher revenue and earnings than Alfa Laval.

Institutional & Insider Ownership

76.7% of A. O. Smith shares are owned by institutional investors. 1.0% of A. O. Smith shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Alfa Laval and A. O. Smith, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alfa Laval 0 0 0 0 N/A
A. O. Smith 1 4 5 0 2.40

A. O. Smith has a consensus target price of $62.33, indicating a potential upside of 12.29%. Given A. O. Smith’s higher probable upside, analysts plainly believe A. O. Smith is more favorable than Alfa Laval.

Summary

A. O. Smith beats Alfa Laval on 10 of the 11 factors compared between the two stocks.

About Alfa Laval

Alfa Laval AB (publ) provides heat transfer, separation, and fluid handling products and solutions worldwide. It operates through five segments: Energy, Food & Water, Marine, Greenhouse, and Operations & Other. The company's fluid handling systems include automation and fluid control equipment; installation materials; analytical, cleaning validation, flow, level, pressure, temperature, and weighing instruments, as well as instrumentation accessories; mixing equipment; centrifugal, circumferential piston, rotary lobe, and screw pumps; rotary jet and spray heads; tank covers and accessories; and valves. Its heat transfer products comprise finned coil and tube, and wetted air heat exchangers; exhaust gas economizers, and oil/gas-fired composite steam and steam boilers; burners; oil/gas-fired hot water and thermal, and waste heat recovery heaters; cooling and heating systems, multi-energy pilots, pressurization sets, storage tanks, and tap water systems; plate heat exchangers; scraped surface heat exchangers; and tubular heat exchangers. The company's separation products include cylindrical filter baskets and filtering elements; decanters and separators; evaporation systems; filters and strainers; and membrane and pump control systems. Its process solutions comprise ballast water, brewery, bulk, desalination, environmental protection, filling, fresh water, fuel conditioning, marine exhaust gas, olive and vegetable oil, protein, refrigeration, safety, and thermal solutions. The company serves the biotech and pharmaceuticals, chemicals, energy, food, dairy, beverage, home and personal care, HVAC, machinery and manufacturing, marine and transportation, mining, minerals, pigment, pulp and paper, refrigeration, semiconductor and electronics, steel, and water and waste treatment industries. The company was formerly known as AB Separator and changed its name to Alfa Laval AB (publ) in 1963. Alfa Laval AB (publ) was founded in 1883 and is headquartered in Lund, Sweden.

About A. O. Smith

A. O. Smith Corporation manufactures and markets residential and commercial gas and electric water heaters, boilers, tanks, and water treatment products in North America, China, Europe, and India. It operates through two segments, North America and Rest of World. The company offers water heaters for residences, restaurants, hotels and motels, office buildings, laundries, car washes, and small businesses; residential and commercial boilers for space heating applications in hospitals, schools, hotels, and other commercial buildings; and water treatment products, including on-the-go filtration bottles, point-of-use carbon and reverse osmosis products, point-of-entry water softeners, and whole-home water filtration products for residences, restaurants, hotels, and offices. It also provides food and beverage filtration products; expansion tanks, commercial solar water heating systems, swimming pool and spa heaters, and related products and parts; and heat pumps, combi-boilers, solar tank units, and air purification products. The company offers its products primarily under the A. O. Smith and State brands. It distributes its products through independent wholesale plumbing distributors, as well as through retail channels consisting of hardware and home center chains, and manufacturer representative firms; and offers Aquasana branded products directly to consumers through e-commerce, as well as other online retailers. A. O. Smith Corporation was founded in 1874 and is headquartered in Milwaukee, Wisconsin.

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