3 Water Stocks With Decades Of Rising Dividends

A.O. Smith has grown its earnings per share by 20% per year on average since the Great Recession, in 2009. It has achieved such an impressive growth record thanks to the strong recovery of the U.S. housing market since the Great Recession. Another reason behind the exceptional growth record of the company is its outstanding performance in China, where it has grown its sales by 20% per year on average over the last decade. The company has greatly benefited from the strong economic growth of China and the boom of its middle class.

In fact, A.O. Smith is a great way for U.S. investors to gain some exposure to the tremendous economic growth of China. The Chinese economy has been growing by more than 6% per year every single year whereas all the developed economies have been growing at a much slower pace.

A.O. Smith is not immune to the pandemic but it has proved fairly resilient to this crisis. To be sure, in the full year 2020, its revenues and its adjusted earnings per share dipped only 3% over the prior year. Notably, its sales in North America grew 2%. Such a performance amid a severe recession is a testament to the strength of the business model of the company. Another testament to this strength is the rock-solid balance sheet of A.O. Smith. The absence of net debt in the balance sheet confirms that the company can grow at a fast pace with its internally generated cash flows, without the need to issue any debt.

As mentioned above, the pandemic resulted in a slight decrease in A.O. Smith’s revenue and earnings-per-share. However, thanks to the massive vaccination program underway, the pandemic is likely to subside later this year. As a result, A.O. Smith is likely to return to its multi-year growth trajectory in 2021.

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Disclaimer: All the information in this article - is published in good faith and for general information purpose only. Hashtag Investing does not make any warranties about the completeness, ...

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