A. O. Smith (NYSE:AOS) versus Gibraltar Industries (NASDAQ:ROCK) Financial Analysis

Gibraltar Industries (NASDAQ:ROCK) and A. O. Smith (NYSE:AOS) are both industrials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, earnings, dividends, profitability and risk.

Risk & Volatility

Gibraltar Industries has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500. Comparatively, A. O. Smith has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500.

Institutional & Insider Ownership

98.4% of Gibraltar Industries shares are held by institutional investors. Comparatively, 76.1% of A. O. Smith shares are held by institutional investors. 0.9% of Gibraltar Industries shares are held by insiders. Comparatively, 0.5% of A. O. Smith shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Gibraltar Industries and A. O. Smith”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gibraltar Industries	$1.14 billion	1.05	-$44.39 million	($5.04)	-7.96
A. O. Smith	$3.83 billion	2.24	$546.20 million	$3.60	17.53

A. O. Smith has higher revenue and earnings than Gibraltar Industries. Gibraltar Industries is trading at a lower price-to-earnings ratio than A. O. Smith, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Gibraltar Industries and A. O. Smith, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gibraltar Industries	1	1	1	1	2.50
A. O. Smith	2	7	1	0	1.90

A. O. Smith has a consensus target price of $66.00, suggesting a potential upside of 4.60%. Given A. O. Smith’s higher possible upside, analysts plainly believe A. O. Smith is more favorable than Gibraltar Industries.

Profitability

This table compares Gibraltar Industries and A. O. Smith’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gibraltar Industries	-10.43%	11.23%	4.91%
A. O. Smith	13.01%	27.66%	14.52%

Summary

A. O. Smith beats Gibraltar Industries on 9 of the 14 factors compared between the two stocks.

About Gibraltar Industries

Gibraltar Industries, Inc. manufactures and provides products and services for the renewable energy, residential, agtech, and infrastructure markets in the United States and internationally. It operates through four segments: Renewables, Residential, Agtech, and Infrastructure. The Renewables segment designs, engineers, manufactures, and installs solar racking and electrical balance of systems for commercial and distributed generation scale solar installations. The Residential segment offers roof and foundation ventilation products and accessories; mail and electronic package solutions, including single mailboxes, cluster style mail and parcel boxes for single and multi-family housing, and electronic package locker systems; roof edgings and flashings; soffits and trims; drywall corner beads; metal roofing and accessories; rain dispersion products comprising gutters and accessories; and exterior retractable awnings. This segment also provides electronic parcel lockers, pipe flashings, and remote-controlled deck awnings and valances for sun protection. The Agtech segment offers growing and processing solutions, including the designing, engineering, manufacturing, construction, maintenance, and support of greenhouses; and indoor growing operations for retail, fruits and vegetables, flowers, cannabis, commercial, institutional and conservatories, and car wash structure applications. The Infrastructure segment offers expansion joints, structural bearings, rubber pre-formed seals and other sealants, elastomeric concrete, and bridge cable protection systems. It serves solar developers, home improvement retailers, wholesalers, distributors, and contractors, as well as institutional and commercial growers of fruit, vegetables, flowers, and plants. Gibraltar Industries, Inc. was founded in 1972 and is headquartered in Buffalo, New York.

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.