Contrasting Smith (A.O.) Corporation (AOS) & FARO Technologies (FARO)
Smith (A.O.) Corporation (NYSE: AOS) and FARO Technologies (NASDAQ:FARO) are both industrial products companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, risk, earnings, valuation and institutional ownership.
Risk & Volatility
Smith (A.O.) Corporation has a beta of 1.49, indicating that its stock price is 49% more volatile than the S&P 500. Comparatively, FARO Technologies has a beta of 1.36, indicating that its stock price is 36% more volatile than the S&P 500.
This is a summary of recent ratings for Smith (A.O.) Corporation and FARO Technologies, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Smith (A.O.) Corporation||0||2||4||0||2.67|
Smith (A.O.) Corporation currently has a consensus price target of $68.80, suggesting a potential upside of 17.75%. FARO Technologies has a consensus price target of $41.00, suggesting a potential upside of 12.79%. Given Smith (A.O.) Corporation’s higher possible upside, equities analysts clearly believe Smith (A.O.) Corporation is more favorable than FARO Technologies.
Institutional and Insider Ownership
74.0% of Smith (A.O.) Corporation shares are owned by institutional investors. Comparatively, 94.6% of FARO Technologies shares are owned by institutional investors. 1.3% of Smith (A.O.) Corporation shares are owned by company insiders. Comparatively, 2.4% of FARO Technologies shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
This table compares Smith (A.O.) Corporation and FARO Technologies’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Smith (A.O.) Corporation||12.10%||22.25%||11.89%|
Smith (A.O.) Corporation pays an annual dividend of $0.56 per share and has a dividend yield of 1.0%. FARO Technologies does not pay a dividend. Smith (A.O.) Corporation pays out 28.4% of its earnings in the form of a dividend. FARO Technologies has raised its dividend for 11 consecutive years.
Valuation & Earnings
This table compares Smith (A.O.) Corporation and FARO Technologies’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Smith (A.O.) Corporation||$2.86 billion||3.52||$549.50 million||$1.97||29.66|
|FARO Technologies||$335.54 million||1.81||$13.50 million||($0.03)||-1,211.26|
Smith (A.O.) Corporation has higher revenue and earnings than FARO Technologies. FARO Technologies is trading at a lower price-to-earnings ratio than Smith (A.O.) Corporation, indicating that it is currently the more affordable of the two stocks.
Smith (A.O.) Corporation beats FARO Technologies on 10 of the 15 factors compared between the two stocks.
Smith (A.O.) Corporation Company Profile
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. Both segments primarily manufacture and market in their respective regions of the world. Its North America segment manufactures and globally markets specialty commercial water heating equipment, condensing and non-condensing boilers and water systems tanks. It also manufactures and markets in-home air purification products in China. It serves residential and commercial end markets in North America with a range of products, which include water heaters, boilers and other. It supplies water heaters to the residential market in China with a broad product offering, including electric, gas, gas tankless, heat pump and solar units, as well as combi boilers.
FARO Technologies Company Profile
FARO Technologies, Inc. designs, develops, manufactures, markets and supports software driven, three-dimensional (3D) measurement, imaging and realization systems. The Company operates in three segments: Factory Metrology, Construction BIM-CIM and Other. It sells its products through a direct sales force across customers in a range of manufacturing, industrial, architecture, surveying, building construction and law enforcement applications. Its FaroArm, FARO Laser ScanArm, FARO Gage, FARO Laser Tracker, FARO Cobalt Array 3D Imager AMP, and their companion CAM2 software provide for Computer-Aided Design-based inspection and/or factory-level statistical process control and surveying. It operates in international markets throughout the world and maintain sales offices in Australia, Brazil, Canada, China, India, Italy, Japan, Malaysia, Mexico, the Netherlands, Poland, Portugal, Singapore, South Korea, Spain, Switzerland, Thailand, Turkey, the United Kingdom, the United States and Vietnam.
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