At a glance
Smith AO Corporation is worth $8.79B, about 17 times its fiscal 2025 earnings. Revenue grew 0.3% to $3.83B in fiscal 2025, with 14.3% kept as profit; over 5 years it has grown 5.8% a year. It pays a 2.23% dividend yield, raised every year for at least 9 years, and returned $2.70B to shareholders in dividends and buybacks over FY2021–FY2025. The stock returned +1.4% over the past year with dividends reinvested and −1.6% a year over five years, against +11.5% and +11.7% for the S&P 500. At its worst it fell 21.9% in the 2020 crash (S&P 500: 33.7%) and 42.1% in the 2022 bear market (S&P 500: 24.5%), and was back at its earlier high 2 months and 15 months after the lows.
The business in plain English
A. O. Smith makes equipment that heats and treats water in homes and commercial buildings. Its products include gas and electric water heaters, boilers for space heating, heat pumps, tanks, and water treatment systems such as water softeners and drinking-water filters. Customers range from homeowners to restaurants, hotels, schools and hospitals. Sales were $3.83 billion in fiscal 2025.
The North America segment (business unit) brought in about 78% of 2025 sales. The company believes it is the region's largest water heater maker. Much of that business comes from replacing existing units. It sells through about 800 plumbing wholesalers, mainly under the A. O. Smith and State brands. It also sells through national home center chains, including a long-standing exclusive deal with Lowe's. Its Lochinvar brand is among North America's leading boiler names, and its water treatment brands include Aquasana and Hague.
The Rest of World segment made up about 22% of sales, mostly in China. There it sells water heaters, water purifiers and kitchen appliances through about 8,700 points of sale. In the third quarter of 2025 it began reviewing strategic options for the China business. By country, the United States accounted for 68.4% of 2025 sales, China 17.6% and Canada 8.5%. In India, it added Pureit, a water purifier business acquired from Unilever in 2024.
Price history
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AOS +1.4% over the year to Nov 2, 2026, total return with dividends reinvested.
How it makes money
By geography
| United States | $2.62B | 68.4% |
| China | $672.8M | 17.6% |
| Canada | $326.5M | 8.5% |
| Other Foreign | $211.8M | 5.5% |
Latest results
- In Q3 FY2026 (ended Sep 30, 2026), revenue was $940.5M, down 0.2% from a year earlier, and net income was $126.3M (-4.3%).
- For fiscal 2025, revenue was $3.83B (+0.3% year over year; +5.8% a year from FY2020 to FY2025) with a 14.3% net margin.
Financial health check
| Revenue growth a year (FY2020–FY2025) | +5.8% good |
|---|---|
| Operating margin | 19% good |
| Free cash flow margin | 14.3% good |
| Return on equity (FY2025) | 29.4% good |
| Return on assets (FY2025) | 17.4% good |
| Net cash (cash minus debt) | $-438.6M weak |
| Fiscal year | Revenue | Net income | Free cash flow |
|---|---|---|---|
| FY2020 | $2.90B | $344.9M | $505.3M |
| FY2021 | $3.54B | $487.1M | $566.0M |
| FY2022 | $3.75B | $235.7M | $321.1M |
| FY2023 | $3.85B | $556.6M | $597.7M |
| FY2024 | $3.82B | $533.6M | $473.8M |
| FY2025 | $3.83B | $546.2M | $546.0M |
Valuation snapshot
| Market value | $8.79B |
|---|---|
| P/E ratio | 17 |
| Dividend yield | 2.23% |
Rank among 1514 US companies
Price behavior
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | |
|---|---|---|---|---|---|
| AOS price data to Nov 2, 2026 | +0.1% | +1.4% | -0.9% | -1.6% | +5.9% |
Show as a table
| Year | Price data |
|---|---|
| 2026 (to date) | +0.1% |
| 2025 | +0.1% |
| 2024 | -15.9% |
| 2023 | +47.3% |
| 2022 | -32.1% |
| 2021 | +59.1% |
| 2020 | +17.5% |
| 2019 | +13.6% |
| 2018 | -29.4% |
| 2017 | +30.8% |
| 2016 | +25.1% |
| 2015 | +37.3% |
| 2014 | +5.9% |
| 2013 | +73.0% |
| 2012 | +59.5% |
| 2011 | +6.9% |
| 2010 | +34.3% |
| 2009 | +50.4% |
| 2008 | -13.9% |
| 2007 | -5.0% |
| 2006 | +7.7% |
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Lost 51.8% over that stretch · deepest drop along the way 54.1%, back to its old high 11.7 months after the low |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Lost 19.3% over that stretch · deepest drop along the way 21.9%, back to its old high 1.6 months after the low |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Lost 40.4% over that stretch · deepest drop along the way 42.1%, back to its old high 14.7 months after the low |
Insider activity
Form 4 filings from 2025-10-30 to 2026-10-30 (25 read): 0 open-market purchases and 2 sales ($111K).
| Date | Insider | Type | Value |
|---|---|---|---|
| Mar 4, 2026 | Darrell W. Schuh SVP; President & GM Lochinvar | sell | $82K |
| Feb 13, 2026 | Darrell W. Schuh SVP; President & GM Lochinvar | sell | $28K |
Who owns it
Large shareholders (13G filings)
| FMR LLC | 10.7% | Jul 31, 2026 |
| Vanguard Capital Management | 7.39% | Mar 31, 2026 |
| Vanguard Portfolio Management | 6.32% | Mar 31, 2026 |
| BlackRock, Inc. | 6% | Jun 30, 2025 |
| STATE STREET CORPORATION | 5.2% | Dec 31, 2025 |
ETFs with the most weight in AOS
| AQWA Global X Clean Water ETF | 4.44% |
| PHO Invesco Water Resources ETF | 4.16% |
| TBLU Tortoise Global Water ESG Fund | 2.48% |
| IPDP Dividend Performers ETF | 2.11% |
| FDIV MarketDesk Focused U.S. Dividend ETF | 2.04% |
| FIW First Trust Water ETF | 2.03% |
| SAGP Strategas Global Policy Opportunities ETF | 1.9% |
| MGRO VanEck Morningstar Wide Moat Growth ETF | 1.73% |
What could go wrong
- Exposure to China's economy and consumers. About 18% of 2025 sales came from China. A weaker economy, property market or consumer shift there could hurt results. A strategic review of that business began in the third quarter of 2025.
- Tariffs and steel costs. Steel is the main raw material. U.S. tariffs, and retaliation by other countries, could raise input costs. That could force price increases that reduce demand, or squeeze profit margins.
- Slower construction or replacement demand. Much of North American revenue comes from replacing old water heaters and boilers. A slowdown in new homes, commercial building or replacement volume, including weaker demand for commercial space, could cut sales.
- Losing a major customer. Products are sold through about 800 wholesale distributors and major home center chains, including Lowe's. Losing, cutting or delaying orders from one or more of its largest customers could hurt sales.
- Changing energy and climate rules. Efficiency and climate rules can require costly product changes. A Department of Energy rule starting in October 2026 requires all commercial water heaters to be condensing, a high-efficiency design.
- Founding family holds outsized influence. Members of the founding family and trusts for their benefit can influence all matters needing shareholder approval, such as board elections. Other shareholders may have less say.
Recent events
- Quarterly results released
- Investor presentation or announcement
- Quarterly results released
- Executive or board change
- Executive or board change
- Quarterly results released
- Shareholder vote results; Other company announcement
- Quarterly results released
- New debt or financial obligation; Other company announcement
- Other company announcement
For income and retirement investors
A. O. Smith has raised its dividend at least 9 years in a row through fiscal 2025, and the streak may be longer. Dividends per share grew from $0.98 in 2020 to $1.38 in 2025, about 7.1% a year. The 2025 dividend used 35.8% of earnings and of free cash flow (cash left after running the business and investing in equipment). Buybacks (repurchases of its own shares) totaled $1.78 billion from FY2021 to FY2025, nearly double the $917 million paid in dividends. The dividend yield was 2.37% as of October 28, 2026.
The shares have fallen hard in downturns. They dropped 54.1% from peak to low in the 2008 financial crisis and 42.1% in the 2022 bear market. They took about 12 and 15 months after the low to recover. A 21.9% drop in the 2020 COVID crash was regained within two months. A single stock carries more risk than a diversified fund, since one company's setbacks are not offset by others.
Questions investors ask
How does A. O. Smith make money?
A. O. Smith sells water heaters, boilers, heat pumps and water treatment products to homeowners and businesses. Sales were $3.83 billion in fiscal 2025, with about 78% from North America, where much of the business is replacing existing units. It sells through about 800 plumbing wholesalers, home center chains such as Lowe's, and water treatment dealers. Most of the rest came from China, with India and other markets smaller. Net income was $546.2 million, or $3.85 per share.
Does A. O. Smith raise its dividend every year?
Yes. A. O. Smith has raised its dividend at least 9 years in a row through fiscal 2025, and the streak may be longer. The dividend was $1.38 per share in 2025, up from $0.98 in 2020, or about 7.1% growth a year. It used 35.8% of 2025 earnings, which leaves room if profits dip. The dividend yield was 2.37% as of October 28, 2026. Past increases do not guarantee future ones.
How much of A. O. Smith's sales come from China?
About 18% of 2025 sales came from China, the company's largest market outside the United States. China makes up most of the Rest of World segment. A. O. Smith has operated there for 30 years, selling water heaters, water purifiers and kitchen appliances. It competes with Haier and Midea there. In the third quarter of 2025, the company began assessing strategic options for the China business, including partnerships and other alternatives. It also said it sees substantial long-term prospects there.
Does A. O. Smith have a lot of debt?
Not much compared with its earnings. As of June 30, 2026, A. O. Smith had $637.5 million of total debt and $181.3 million of cash and investments, so debt exceeded cash by about $456 million. That is less than its fiscal 2025 operating income (profit from the core business before interest and taxes) of $728.6 million. It is also about a third of shareholders' equity of $1.84 billion. A January 6, 2026 filing reported a new debt obligation.
How has AOS stock performed over the long term?
Unevenly. As of October 28, 2026, the share price was up about 61% over 10 years, or 4.9% a year before dividends. It was down about 5% over five years and 6.9% over one year. From 2021 to 2025, calendar-year returns swung from a 59.1% gain in 2021 to a 32.1% loss in 2022. The price-to-earnings ratio (share price divided by yearly earnings per share) was 15.8, based on fiscal 2025 earnings.