Focused on building reliable datasets, financial models, and research tools for value-minded investors. Committed to turning complex data into practical guidance for value-investing and long-term wealth.
Dr. Charlie Tian is the founder and CEO of GuruFocus.com, a leading global investment research platform established in 2004. With a Ph.D. in physics, Dr. Tian transitioned from science to finance, applying a data-driven, disciplined approach to value investing.
A.O. SmithSTU:3SM +1.91%78 Interest Coverage is 23.47 as of Jun. 2026, which is 62% below its 10-year median of 62.50. GuruFocus rates STU:3SM with a GF Score™ of 78/100 and a GF Value™ of €67.17 (Modestly Undervalued). The stock has 1 warning sign investors should review. Among 2,324 Industrial Products companies, A.O. Smith ranks better than 65.4% on this metric.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's
Operating Income
by its Interest Expense. A.O. Smith's
Operating Income
for the
three
months ended in Jun. 2026 was €165 Mil. A.O. Smith's Interest Expense for the
three
months ended in Jun. 2026 was €-7 Mil.
A.O. Smith's interest coverage for the quarter that ended in Jun. 2026 was 23.47.
The higher the ratio, the stronger the company's financial strength is.
The historical rank and industry rank for A.O. Smith's Interest Coverage or its related term are showing as below:
STU:3SM'
s Interest Coverage Range Over the Past 10 Years
Min: 32.61 Med: 62.5 Max: 141.74
Current: 32.61
STU:3SM's Interest Coverage is ranked better than 65.4% of 2324
companies
in the Industrial Products industry
Industry Median: 14.735
vs STU:3SM: 32.61
A.O. Smith (STU:3SM) Interest Coverage Explanation
Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.
Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .
A.O. Smith Interest Coverage Related Terms
A.O. Smith Interest Coverage Historical Data
* Premium members only.
The historical data trend for A.O. Smith's Interest Coverage 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.
Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.
STU:3SM vs FLS, JBTM, NPO: Interest Coverage Comparison
For the Specialty Industrial Machinery subindustry, A.O. Smith's Interest Coverage, along with its competitors' market caps and Interest Coverage 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 Interest Coverage vs Industrial Products Industry
For the Industrial Products industry and Industrials sector, A.O. Smith's Interest Coverage distribution charts can be found below:
* The bar in red indicates where A.O. Smith's Interest Coverage falls into.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:
* 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.
A.O. Smith (STU:3SM) has a Interest Coverage of 23.47 as of Jun. 2026. Interest Coverage measures a company's capability to pay interest expenses on its debt. View historical data on A.O. Smith and its competitors. This is 62% below median its historical median of 62.50. Over the past decade, A.O. Smith's Interest Coverage has ranged from 32.61 to 141.74. According to the industry distribution chart, A.O. Smith ranks #804 out of 2324 companies in the Industrial Products industry, placing it in the top 34.6%.
Is A.O. Smith's Interest Coverage too high?
A.O. Smith's current Interest Coverage of 23.47 is 62% below median its 10-year median of 62.50. Over the past 10 years, this metric has ranged from a low of 32.61 to a high of 141.74. The Industrial Products industry median Interest Coverage is 14.74. A.O. Smith's value of 23.47 is 59.3% above this industry median. Based on the distribution chart, A.O. Smith ranks #804 out of 2324 companies in the Industrial Products industry, which is above the industry midpoint. Overall, A.O. Smith has a GF Score™ of 78/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does A.O. Smith's Interest Coverage compare to FLS and JBTM?
According to the Industrial Products industry distribution chart, A.O. Smith ranks #804 out of 2324 companies for Interest Coverage. This puts A.O. Smith in the upper half of its industry. The industry median Interest Coverage is 14.74. A.O. Smith's value of 23.47 is 59.3% above this benchmark. Historically, A.O. Smith's own Interest Coverage has ranged from 32.61 to 141.74 over the past decade. While the company's 10-year median is 62.50 vs. the industry median of 14.74, A.O. Smith has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Interest Coverage for an Industrial Products company?
The median Interest Coverage among Industrial Products companies is 14.74, based on 2,324 companies in the industry. Companies in the top quartile (top 25%) have a Interest Coverage significantly above this median, while those in the bottom quartile fall well below. However, Interest Coverage should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. A.O. Smith's current Interest Coverage of 23.47 is 59.3% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Interest Coverage mean?
A high Interest Coverage can signal that a stock is expensive relative to its fundamentals. Interest Coverage measures a company's capability to pay interest expenses on its debt. View historical data on A.O. Smith and its competitors. For the Industrial Products industry, the median Interest Coverage is 14.74 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. A.O. Smith's current Interest Coverage is 23.47, which is 62% below median its own 10-year median of 62.50. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is A.O. Smith stock overvalued right now?
Based on GuruFocus' analysis, A.O. Smith (STU:3SM) is currently considered Modestly Undervalued. The stock's GF Value™ is €67.17, compared to a current price of €52.34 — trading 22.1% below its estimated fair value. The current Interest Coverage is 23.47, which is 62% below median its 10-year median of 62.50 and 59.3% above the Industrial Products industry median of 14.74. A.O. Smith's overall GF Score™ is 78/100 with 1 warning sign to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Interest Coverage calculated?
Interest Coverage is calculated from a company's financial statements. For A.O. Smith (STU:3SM), the current Interest Coverage is 23.47 as of Jun. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is A.O. Smith (STU:3SM) Overvalued in 2026?
Based on GuruFocus' analysis, A.O. Smith stock appears to be undervalued.
The current stock price of €52.34 is trading 22.1% below its estimated GF Value™ of €67.17.
GuruFocus considers A.O. Smith to be Modestly Undervalued.
Key valuation signals for STU:3SM:
Interest Coverage: 23.47 (62% below median its 10-year median of 62.50)
GF Value™: €67.17 vs. price of €52.34 (22.1% below fair value)
Industry Position: 59.3% above the Industrial Products median (#804 of 2324)
No single metric tells the full story. See the STU:3SM stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
A.O. Smith manufactures a broad lineup of water heaters, boilers, and water treatment products. The company has two reporting segments: North America (80% of sales) and rest of world (20% of sales). A.O. Smith is the leading manufacturer of water heaters in North America for the residential and commercial markets, with approximately 36% and 52% market share, respectively. Residential water heaters account for most of North American sales and are distributed equally through wholesale and retail channels. Most of A.O. Smith's international revenue is from China, a market the company entered in the mid-1990s.
78GF Score
Get the complete analysis for STU:3SM
Interest Coverage is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
STU:3SM has been successfully added to your 
