ROE % is calculated as Net Income divided by its average Total Stockholders Equity over a certain period of time. A.O. Smith's annualized net income for the quarter that ended in Dec. 2023 was $549 Mil. A.O. Smith's average Total Stockholders Equity over the quarter that ended in Dec. 2023 was $1,863 Mil. Therefore, A.O. Smith's annualized ROE % for the quarter that ended in Dec. 2023 was 29.47%.
The historical rank and industry rank for A.O. Smith's ROE % or its related term are showing as below:
AOS'
s ROE % Range Over the Past 10 Years
Min: 13.17 Med: 20.96 Max: 30.99
Current: 30.4
During the past 13 years, A.O. Smith's highest ROE % was 30.99%. The lowest was 13.17%. And the median was 20.96%.
AOS's ROE % is ranked better than 95.02% of 2953
companies
in the Industrial Products industry
Industry Median: 7.1
vs AOS: 30.40
A.O. Smith ROE % Historical Data
The historical data trend for A.O. Smith's ROE % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Specialty Industrial Machinery subindustry, A.O. Smith's ROE %, along with its competitors' market caps and ROE % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
A.O. Smith ROE % Distribution
For the Industrial Products industry and Industrials sector, A.O. Smith's ROE % distribution charts can be found below:
* The bar in red indicates where A.O. Smith's ROE % falls into.
A.O. Smith ROE % Calculation
A.O. Smith's annualized ROE % for the fiscal year that ended in Dec. 2023 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
In the calculation of annual ROE %, the net income of the last fiscal year and the average total shareholder equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Dec. 2023) net income data.
ROE % is displayed in the 30-year financial page.
A.O. Smith (NYSE:AOS) ROE % Explanation
ROE % measures the rate of return on the ownership interest (shareholder's equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE % shows how well a company uses investment funds to generate earnings growth. ROE %s between 15% and 20% are considered desirable.
The factors that affect a company's ROE % can be illustrated with the three-step DuPont Analysis:
Note:
The net income data used here is four times the quarterly (Dec. 2023) net income data. The Revenue data used here is four times the quarterly (Dec. 2023) revenue data. The same rule applies to Pre-Tax Income and Operating Income.
* In the five-step DuPont Analysis, Operating Income is only available for non-financial companies. Thus, for Insurance companies, we use EBIT as a substitution of Operating Income. For Banks, both Operating Income and EBIT is unavailable. Thus we combined Interest Burden and Operating Margin % into Pretax Margin %, and the DuPont Analysis is divided into four components instead.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Be Aware
Net Income is used.
Because a company can increase its ROE % by having more financial leverage, it is important to watch the equity multiplier when investing in high ROE % companies. Like ROA %, ROE % is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their ROE %s can be extremely high.
A.O. Smith ROE % Related Terms
Thank you for viewing the detailed overview of A.O. Smith's ROE % provided by GuruFocus.com. Please click on the following links to see related term pages.
A.O. Smith Corporation manufactures and markets comprehensive lines of residential and commercial gas, gas tankless, and electric water heaters. Supplementary products include water heating equipment, condensing and noncondensing boilers, and water system tanks. The company's two operating segments are by geographic region: North America (majority of total revenue) and the Rest of the World. A material portion of sales in North America derive from replacing existing products, and the company utilizes a wholesale distribution channel and multiple selling locations. The Rest of the World segment sells majorly in Asian countries and operates sales offices to expand distribution and market its product portfolio.
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