Analyzing Smith (A.O.) Corporation (AOS) and General Cable Corporation (BGC)
Smith (A.O.) Corporation (NYSE: AOS) and General Cable Corporation (NYSE:BGC) are both industrial products companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, dividends, institutional ownership, profitability and earnings.
This table compares Smith (A.O.) Corporation and General Cable Corporation’s 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%|
|General Cable Corporation||-4.80%||13.47%||1.10%|
This is a breakdown of current recommendations for Smith (A.O.) Corporation and General Cable Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Smith (A.O.) Corporation||0||2||4||0||2.67|
|General Cable Corporation||0||2||0||0||2.00|
Smith (A.O.) Corporation presently has a consensus target price of $68.80, suggesting a potential upside of 13.93%. Given Smith (A.O.) Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe Smith (A.O.) Corporation is more favorable than General Cable Corporation.
Volatility and Risk
Smith (A.O.) Corporation has a beta of 1.5, indicating that its share price is 50% more volatile than the S&P 500. Comparatively, General Cable Corporation has a beta of 2.85, indicating that its share price is 185% more volatile than the S&P 500.
Institutional & Insider Ownership
74.0% of Smith (A.O.) Corporation shares are held by institutional investors. Comparatively, 98.1% of General Cable Corporation shares are held by institutional investors. 1.3% of Smith (A.O.) Corporation shares are held by company insiders. Comparatively, 1.8% of General Cable Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares Smith (A.O.) Corporation and General Cable Corporation’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Smith (A.O.) Corporation||$2.86 billion||3.64||$549.50 million||$1.97||30.65|
|General Cable Corporation||$3.70 billion||0.27||$209.90 million||($3.57)||-5.56|
Smith (A.O.) Corporation has higher revenue, but lower earnings than General Cable Corporation. General Cable Corporation 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.
Smith (A.O.) Corporation pays an annual dividend of $0.56 per share and has a dividend yield of 0.9%. General Cable Corporation pays an annual dividend of $0.72 per share and has a dividend yield of 3.6%. Smith (A.O.) Corporation pays out 28.4% of its earnings in the form of a dividend. General Cable Corporation pays out -20.2% 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. General Cable Corporation has increased its dividend for 11 consecutive years. General Cable Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Smith (A.O.) Corporation beats General Cable Corporation on 9 of the 17 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.
General Cable Corporation Company Profile
General Cable Corporation is engaged in the development, design, manufacture, marketing and distribution of copper, aluminum and fiber optic wire and cable products for use in the energy, industrial, construction, specialty and communications markets. The Company’s segments include North America, Europe, Latin America, and Africa/Asia Pacific. The Company produces and sells to a range of end markets, including markets for electric utility, electrical infrastructure, communications, construction and rod mill products. As of December 31, 2016, the North America segment included 17 manufacturing facilities across the region. The Europe segment consists of six manufacturing facilities across the region. The Latin America segment consists of six manufacturing facilities across the region. The Africa/Asia Pacific segment consists of four manufacturing facilities across the segment.
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