#2 - A.O. Smith (NYSE:AOS)
A.O. Smith (NYSE: AOS) - Another China stock to look at is A.O. Smith. This company has an $8 billion market cap and they are the leader in products such as water heaters, boilers, and other water treatment products. While this may not be as sexy as e-commerce, it may be a safer bet, particularly in an uncertain trade environment. In the last 10 years, the stock has risen from $6 per share to a high of $65 before falling back since the trade war with China began. The stock is down about 30% from its high and that is a great reason to buy. The reason for this is supply and demand. China has a burgeoning middle class that needs the company’s products. This has allowed the company to achieve double-digit revenue growth. The stock is currently trading at around 16X forward earnings which, for a stock that is considered to fall in the “defensive” category is pretty reasonable, particularly when its growth shows no sign of slowing down. And investors who are interested in this “utility” stock are looking for dividends. This is another area where A.O. Smith delivers. The company has been issuing, and increasing, their dividend recently. In 2018, they recently increased their dividend by 22%.
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.
Read More - Current Price
- $81.50
- Consensus Rating
- Hold
- Ratings Breakdown
- 1 Buy Ratings, 5 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $88.50 (8.6% Upside)
