Smith (A.O.) Corporation (NYSE: AOS) and FARO Technologies (NASDAQ:FARO) are both industrial products companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, risk, profitability and earnings.
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%|
Risk & Volatility
Smith (A.O.) Corporation has a beta of 1.49, meaning that its share price is 49% more volatile than the S&P 500. Comparatively, FARO Technologies has a beta of 1.36, meaning that its share price is 36% more volatile than the S&P 500.
This is a summary of recent ratings and target prices for Smith (A.O.) Corporation and FARO Technologies, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Smith (A.O.) Corporation||0||2||5||0||2.71|
Smith (A.O.) Corporation presently has a consensus target price of $61.60, suggesting a potential upside of 0.64%. FARO Technologies has a consensus target price of $39.40, suggesting a potential downside of 2.48%. Given Smith (A.O.) Corporation’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Smith (A.O.) Corporation is more favorable than FARO Technologies.
Insider and Institutional Ownership
74.0% of Smith (A.O.) Corporation shares are held by institutional investors. Comparatively, 94.6% of FARO Technologies shares are held by institutional investors. 1.3% of Smith (A.O.) Corporation shares are held by insiders. Comparatively, 2.4% of FARO Technologies shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Smith (A.O.) Corporation pays an annual dividend of $0.56 per share and has a dividend yield of 0.9%. 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 and Earnings
This table compares Smith (A.O.) Corporation and FARO Technologies’ top-line 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||3.71||$549.50 million||$1.97||31.07|
|FARO Technologies||$335.54 million||2.01||$13.50 million||($0.03)||-1,346.22|
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 12 of the 16 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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