AMTEK (NYSE: AME) and Smith (A.O.) Corporation (NYSE:AOS) are both large-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, analyst recommendations, institutional ownership, earnings, dividends and risk.

Volatility & Risk

AMTEK has a beta of 1.31, indicating that its stock price is 31% more volatile than the S&P 500. Comparatively, Smith (A.O.) Corporation has a beta of 1.49, indicating that its stock price is 49% more volatile than the S&P 500.

Valuation & Earnings

This table compares AMTEK and Smith (A.O.) Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
AMTEK $3.99 billion 3.79 $1.04 billion $2.28 28.77
Smith (A.O.) Corporation $2.86 billion 3.59 $549.50 million $1.97 30.23

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

Dividends

AMTEK pays an annual dividend of $0.36 per share and has a dividend yield of 0.5%. Smith (A.O.) Corporation pays an annual dividend of $0.56 per share and has a dividend yield of 0.9%. AMTEK pays out 15.8% of its earnings in the form of a dividend. Smith (A.O.) Corporation pays out 28.4% 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. Smith (A.O.) Corporation has raised its dividend for 11 consecutive years. Smith (A.O.) Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares AMTEK and Smith (A.O.) Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AMTEK 13.26% 16.28% 7.68%
Smith (A.O.) Corporation 12.10% 22.25% 11.89%

Institutional and Insider Ownership

85.6% of AMTEK shares are owned by institutional investors. Comparatively, 74.0% of Smith (A.O.) Corporation shares are owned by institutional investors. 2.1% of AMTEK shares are owned by insiders. Comparatively, 1.3% of Smith (A.O.) Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for AMTEK and Smith (A.O.) Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AMTEK 0 1 9 0 2.90
Smith (A.O.) Corporation 0 2 4 0 2.67

AMTEK presently has a consensus price target of $64.40, suggesting a potential downside of 1.81%. Smith (A.O.) Corporation has a consensus price target of $68.80, suggesting a potential upside of 15.53%. Given Smith (A.O.) Corporation’s higher probable upside, analysts plainly believe Smith (A.O.) Corporation is more favorable than AMTEK.

Summary

AMTEK beats Smith (A.O.) Corporation on 10 of the 17 factors compared between the two stocks.

AMTEK Company Profile

AMETEK, Inc. is a manufacturer of electronic instruments and electromechanical devices with operations in North America, Europe, Asia and South America. The Company operates through two segments: Electronic Instruments (EIG) and Electromechanical (EMG). EIG designs and manufactures instruments for the process, power and industrial and aerospace markets. EIG provides process and analytical instruments for the oil, gas, petrochemical, pharmaceutical, semiconductor and automation markets. It makes monitoring and metering devices, industrial battery chargers and uninterruptible power supplies, programmable power equipment, electrical test equipment and gas turbine sensors. EMG is a differentiated supplier of precision motion control solutions, thermal management systems, specialty metals and electrical interconnects. Its end markets include medical, automation, petrochemical and other industrial markets. It operates a network of aviation maintenance, repair and overhaul (MRO) facilities.

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.

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