A.O. Smith: Great Company, Inferior Investment


  • A.O. Smith Corporation’s stock has returned about 20.5% in the past six months, matching the S&P 500’s return.
  • The author believes that 10 Year Treasury Notes offer superior risk-adjusted returns compared to investing in A.O. Smith’s stock.
  • The author suggests that the stock would need to drop to $42 per share for its cash flows to match those of the Treasury Note.
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It’s been over six months since I published my latest article on A.O. Smith Corporation (NYSE:AOS), and in that article, I suggested that Treasuries were more attractive than the stock. Since then, shares have returned about 20.5%, pretty much matching the return of

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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