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A.O. Smith ROE %

: 26.32% (As of Mar. 2022)
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ROE % is calculated as Net Income attributable to Common Stockholders (Net Income minus dividends to participating security holders) divided by its average Total Stockholders Equity over a certain period of time. A.O. Smith's annualized net income attributable to common stockholders for the quarter that ended in Mar. 2022 was $479 Mil. A.O. Smith's average Total Stockholders Equity over the quarter that ended in Mar. 2022 was $1,821 Mil. Therefore, A.O. Smith's annualized ROE % for the quarter that ended in Mar. 2022 was 26.32%.

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: 13.45   Med: 19.83   Max: 27.67
Current: 27.67

During the past 13 years, A.O. Smith's highest ROE % was 27.67%. The lowest was 13.45%. And the median was 19.83%.

AOS's ROE % is ranked better than
94.37% of 2683 companies
in the Industrial Products industry
Industry Median: 7.65 vs AOS: 27.67

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.

* Premium members only.

A.O. Smith Annual Data
Trend Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
ROE %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 18.76 26.43 21.87 19.62 26.47

A.O. Smith Quarterly Data
Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22
ROE % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 21.14 25.80 28.36 29.95 26.32

Competitive Comparison

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. 2021 is calculated as

ROE %=Net Income attributable to Common Stockholders (A: Dec. 2021 )/( (Total Stockholders Equity (A: Dec. 2020 )+Total Stockholders Equity (A: Dec. 2021 ))/ count )
=487.1/( (1848.3+1832.2)/ 2 )
=487.1/1840.25
=26.47 %

A.O. Smith's annualized ROE % for the quarter that ended in Mar. 2022 is calculated as

ROE %=Net Income attributable to Common Stockholders (Q: Mar. 2022 )/( (Total Stockholders Equity (Q: Dec. 2021 )+Total Stockholders Equity (Q: Mar. 2022 ))/ count )
=479.2/( (1832.2+1808.9)/ 2 )
=479.2/1820.55
=26.32 %

* 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 attributable to common stockholders 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 attributable to common stockholders data used here is four times the quarterly (Mar. 2022) net income attributable to common stockholders 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:

ROE %**(Q: Mar. 2022 )
=Net Income/Total Stockholders Equity
=479.2/1820.55
=(Net Income / Revenue )*(Revenue / Total Assets)*(Total Assets / Total Stockholders Equity)
=(479.2 / 3910.8)*(3910.8 / 3454.65)*(3454.65 / 1820.55)
=Net Margin %*Asset Turnover*Equity Multiplier
=12.25 %*1.132*1.8976
=ROA %*Equity Multiplier
=13.87 %*1.8976
=26.32 %

With this breakdown, it is clear that if a company grows its Net Profit Margin, its Asset Turnover, or its Leverage, it can grow its ROE %.

The factors that affect a company's ROE % can also be illustrated with the five-step DuPont Analysis:

ROE %**(Q: Mar. 2022 )
=Net Income/Total Stockholders Equity
=479.2/1820.55
=(Net Income /Pre-Tax Income) * (Pre-Tax Income/Operating Income) * (Operating Income/Revenue) * (Revenue/Total Assets) * (Total Assets/Total Stockholders Equity)
= (479.2 / 626.4) * (626.4 / 647.2) * (647.2 / 3910.8) * (3910.8 / 3454.65) * (3454.65 / 1820.55)
= Tax Burden * Interest Burden * Operating Margin % * Asset Turnover * Equity Multiplier
= 0.765 * 0.9679 * 16.55 % * 1.132 * 1.8976
=26.32 %

Note: The net income attributable to common stockholders data used here is four times the quarterly (Mar. 2022) net income attributable to common stockholders data. The Revenue data used here is four times the quarterly (Mar. 2022) revenue data. The same rule applies to Pre-Tax Income and Operating Income.

* 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.

** The ROE % used above is for Du Pont Analysis only. It is different from the defined ROE % page on our website, as here it uses Net Income instead of Net Income attributable to Common Stockholders in the calculation.


Be Aware

Net income attributable to common stockholders 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 Business Description

A.O. Smith logo
Industry
Industrials » Industrial Products NAICS : 335312 SIC : 3699
Address
11270 West Park Place, P. O. Box 245008, Suite 170, Milwaukee, WI, USA, 53224-9508
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 primarily to Asian countries and operates sales offices to expand distribution and market its product portfolio.
Executives
Qiu Jack officer: SVP - Pres. A. O. Smith China A. O. SMITH (CHINA) WATER HEATER CO. LTD 336 YAOXIN AVENUE NANJING F4 210038
Goodwin Wallace E officer: SVP; Pres & GM, Lochinvar, LLC LOCHINVAR, LLC 300 MADDOX SIMPSON PARKWAY LEBANON TN 37090
Scheppele Stephanie Melissa officer: SVP - CIO A. O. SMITH CORPORATION 44 VANTAGE WAY NASHVILLE TN 37228
Jones Paul W director 900 COMMERCE DRIVE, SUITE 302 OAK BROOK IL 60523
Smith Mark D director PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: SMITH MARK D a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;}
Rajendra Ajita G director, officer: Executive Chairman A. O. SMITH WATER PRODUCTS COMPANY 500 LINDAHL PARKWAY ASHLAND CITY TN 37015
Wolf Idelle K director PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: WOLF IDELLE K a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;}
Brown Ronald D director 2090 FLORENCE AVENUE CINCINNATI OH 45206
Wulf Gene C director A. O. SMITH CORPORATION 11270 WEST PARK PLACE MILWAUKEE WI 53224
Smith Bruce M director PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: SMITH BRUCE M a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;}
Greubel William P director PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: GREUBEL WILLIAM P a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;}
Kadri Ilham director SEALED AIR CORPORATION 200 RIVERFRONT BOULEVARD ELMWOOD PARK NJ 07407
Stern James F officer: Exec VP, General Counsel & Sec A. O. SMITH CORPORATION 11270 WEST PARK PLACE MILWAUKEE WI 53224
Gurholt Helen E officer: Vice President and Controller A. O. SMITH CORPORATION 11270 WEST PARK PLACE MILWAUKEE WI 53224
Warren David R officer: Senior VP & President and GM A. O. SMITH CORPORATION 500 TENNESSEE WALTZ PARKWAY ASHLAND CITY TN 37015

A.O. Smith Headlines

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