Smith (A.O.) Corporation (NYSE: AOS) and Aerohive Networks (NYSE:HIVE) are both industrial products companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, valuation, risk, institutional ownership, profitabiliy and dividends.

Risk and Volatility

Smith (A.O.) Corporation has a beta of 1.53, suggesting that its stock price is 53% more volatile than the S&P 500. Comparatively, Aerohive Networks has a beta of 1.5, suggesting that its stock price is 50% more volatile than the S&P 500.

Valuation & Earnings

This table compares Smith (A.O.) Corporation and Aerohive Networks’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Smith (A.O.) Corporation $2.79 billion 3.34 $543.10 million $1.97 27.37
Aerohive Networks $166.05 million 1.25 -$27.46 million ($0.65) -7.32

Smith (A.O.) Corporation has higher revenue and earnings than Aerohive Networks. Aerohive Networks 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.

Analyst Recommendations

This is a breakdown of recent recommendations for Smith (A.O.) Corporation and Aerohive Networks, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Smith (A.O.) Corporation 0 1 3 0 2.75
Aerohive Networks 0 3 4 0 2.57

Smith (A.O.) Corporation currently has a consensus price target of $67.50, suggesting a potential upside of 25.21%. Aerohive Networks has a consensus price target of $6.29, suggesting a potential upside of 32.14%. Given Aerohive Networks’ higher possible upside, analysts plainly believe Aerohive Networks is more favorable than Smith (A.O.) Corporation.

Insider & Institutional Ownership

74.9% of Smith (A.O.) Corporation shares are held by institutional investors. Comparatively, 53.3% of Aerohive Networks shares are held by institutional investors. 1.3% of Smith (A.O.) Corporation shares are held by company insiders. Comparatively, 26.2% of Aerohive Networks shares are held 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 Smith (A.O.) Corporation and Aerohive Networks’ 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%
Aerohive Networks -20.12% -109.99% -22.33%

Dividends

Smith (A.O.) Corporation pays an annual dividend of $0.56 per share and has a dividend yield of 1.0%. Aerohive Networks does not pay a dividend. Smith (A.O.) Corporation pays out 28.4% of its earnings in the form of a dividend. Aerohive Networks has raised its dividend for 11 consecutive years.

Summary

Smith (A.O.) Corporation beats Aerohive Networks on 11 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.

Aerohive Networks Company Profile

Aerohive Networks, Inc. together with its subsidiaries, has designed and developed a cloud-managed mobile networking platform that enables enterprises to deploy and manage a mobile-centric network edge. Its portfolio of products and solutions is built around sets of technologies and solutions, which include Enterprise Cloud Networking, Wireless Fidelity (Wi-Fi) Connectivity and Application and Insights. It conducts its business in geographic regions, including Americas; Europe, the Middle East and Africa, and Asia Pacific. Its product portfolio includes hardware products, cloud-based network management and applications, and support services. Its hardware products include access points, branch routers and access switches. Its hardware products are developed by its hardware design team working in conjunction with original design manufacturer partners, and leverage the commercially available Wi-Fi radios, network processors, crypto accelerators and switching chips.

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