A. O. Smith (NYSE:AOS – Get Free Report) and Vestas Wind Systems AS (OTCMKTS:VWDRY – Get Free Report) are both large-cap industrials companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.
Risk and Volatility
A. O. Smith has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500. Comparatively, Vestas Wind Systems AS has a beta of 1.29, suggesting that its stock price is 29% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of current ratings and price targets for A. O. Smith and Vestas Wind Systems AS, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| A. O. Smith | 0 | 5 | 2 | 0 | 2.29 |
| Vestas Wind Systems AS | 1 | 0 | 1 | 2 | 3.00 |
Earnings and Valuation
This table compares A. O. Smith and Vestas Wind Systems AS”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| A. O. Smith | $3.82 billion | 2.64 | $533.60 million | $3.59 | 19.79 |
| Vestas Wind Systems AS | $18.72 billion | 1.02 | $539.97 million | $0.20 | 31.55 |
Vestas Wind Systems AS has higher revenue and earnings than A. O. Smith. A. O. Smith is trading at a lower price-to-earnings ratio than Vestas Wind Systems AS, indicating that it is currently the more affordable of the two stocks.
Dividends
A. O. Smith pays an annual dividend of $1.36 per share and has a dividend yield of 1.9%. Vestas Wind Systems AS pays an annual dividend of $0.02 per share and has a dividend yield of 0.3%. A. O. Smith pays out 37.9% of its earnings in the form of a dividend. Vestas Wind Systems AS pays out 10.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. A. O. Smith has increased its dividend for 31 consecutive years. A. O. Smith is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider and Institutional Ownership
76.1% of A. O. Smith shares are owned by institutional investors. 0.8% of A. O. Smith shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Profitability
This table compares A. O. Smith and Vestas Wind Systems AS’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| A. O. Smith | 13.68% | 28.42% | 16.52% |
| Vestas Wind Systems AS | 3.15% | 17.84% | 2.36% |
Summary
A. O. Smith beats Vestas Wind Systems AS on 11 of the 18 factors compared between the two stocks.
About A. O. Smith
A. O. Smith Corporation manufactures and markets residential and commercial gas and electric water heaters, boilers, heat pumps, tanks, and water treatment products in North America, China, Europe, and India. The company offers water heaters for residences, restaurants, hotels, office buildings, laundries, car washes, and small businesses; boilers for hospitals, schools, hotels, and other large commercial buildings, as well as homes, apartments, and condominiums; and water treatment products comprising point-of-entry water softeners, well water solutions, and whole-home water filtration products, and point-of-use carbon and reverse osmosis products for residences, restaurants, hotels, and offices. It also provides commercial water treatment and filtration product; expansion tanks, commercial solar water heating systems, swimming pool and spa heaters, and related products and parts; and electric wall-hung, gas tankless, combi-boiler, and heat pump and solar water heaters. The company offers its products under the A. O. Smith, State, Lochinvar, Hague, Water-Right, Master Water, Atlantic Filter, and Water Tec brands. It distributes its products through independent wholesale plumbing distributors, as well as to retail channels consisting of hardware and home center chains, and manufacturer representative firms; and offers Aquasana branded products directly to consumers through e-commerce channels. A. O. Smith Corporation was founded in 1874 and is headquartered in Milwaukee, Wisconsin.
About Vestas Wind Systems AS
Vestas Wind Systems A/S engages in the design, manufacture, installation, and services of wind turbines the United States, Denmark, and internationally. It operates in two segments, Power Solutions and Service. The Power Solutions segment offers onshore and offshore wind power plants, wind turbines, development sites, etc. The Service segment engages in the sale of service contracts, spare parts, and related activities. Vestas Wind Systems A/S was founded in 1898 and is headquartered in Aarhus, Denmark.
Receive News & Ratings for A. O. Smith Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for A. O. Smith and related companies with MarketBeat.com's FREE daily email newsletter.
