Analyzing Schneider Electric (OTCMKTS:SBGSY) & A. O. Smith (NYSE:AOS)

Schneider Electric (OTCMKTS:SBGSY) and A. O. Smith (NYSE:AOS) are both large-cap industrials companies, but which is the better business? We will compare the two companies based on the strength of their profitability, institutional ownership, valuation, risk, analyst recommendations, earnings and dividends.

Dividends

Schneider Electric pays an annual dividend of $0.36 per share and has a dividend yield of 0.7%. A. O. Smith pays an annual dividend of $1.36 per share and has a dividend yield of 1.9%. A. O. Smith pays out 37.9% of its earnings in the form of a dividend. A. O. Smith has raised its dividend for 31 consecutive years. A. O. Smith is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Schneider Electric has a beta of 1.41, meaning that its share price is 41% more volatile than the S&P 500. Comparatively, A. O. Smith has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500.

Valuation & Earnings

This table compares Schneider Electric and A. O. Smith”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Schneider Electric	$41.29 billion	3.44	$4.62 billion	N/A	N/A
A. O. Smith	$3.82 billion	2.66	$533.60 million	$3.59	20.18

Schneider Electric has higher revenue and earnings than A. O. Smith.

Analyst Recommendations

This is a breakdown of recent recommendations for Schneider Electric and A. O. Smith, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Schneider Electric	0	3	0	3	3.00
A. O. Smith	0	5	2	0	2.29

A. O. Smith has a consensus target price of $77.43, suggesting a potential upside of 6.89%. Given A. O. Smith’s higher possible upside, analysts plainly believe A. O. Smith is more favorable than Schneider Electric.

Profitability

This table compares Schneider Electric and A. O. Smith’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Schneider Electric	N/A	N/A	N/A
A. O. Smith	13.68%	28.42%	16.52%

Insider & Institutional Ownership

0.8% of Schneider Electric shares are owned by institutional investors. Comparatively, 76.1% of A. O. Smith shares are owned by institutional investors. 0.8% of A. O. Smith shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

A. O. Smith beats Schneider Electric on 9 of the 16 factors compared between the two stocks.

About Schneider Electric

Schneider Electric S.E. engages in the energy management and industrial automation businesses in the France, Western Europe, North America, the Asia Pacific, Eastern Europe, the Middle East, Africa, South America, and internationally. The company offers busway and cable management products, circuit breakers and switches, contactors and protection relays, electrical car charging, electrical protection and control products, energy management software solutions, load banks, power monitoring and control systems, power quality and power factor correction products, push buttons, switches, pilot lights and joysticks, surge protection and power conditioning services, switchboards and enclosures, and transfer switches. It also provides access control, controllers, expansion modules, servers and HMIs, fire and security products, sensors, valves and valve actuators, and variable speed and frequency drives; energy management and software solutions; feeder automation, grid automation, and SCADA software products; and medium voltage switchgears and transformers, outdoor equipment, substation automation products, and switchgear components. In addition, the company offers critical power and cooling services, data center cooling and software, IT power distribution products, prefabricated data center modules, racks and accessories, security and environmental monitoring, surge protection and power conditioning, and uninterruptible power supply products; and home automation and security, installation materials and systems, light switches, and electrical sockets. Further, the company provides human machine interface, industrial automation software and communication, interface relays, measurement and control relays, measurement and instrumentation products, motion controls and robotics, signaling units, solar and energy storage, power supplies, power protection and transformers, process control and safety, RFID systems, and other industrial automation and control products, as well as PLC, PAC, and dedicated controllers. Schneider Electric S.E.was founded in 1836 and is headquartered in Rueil-Malmaison, France.

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. It also provides commercial water treatment and filtration product; expansion tanks, commercial solar water heating systems, swimming pool and spa heaters, and related products and parts; and electric wall-hung, gas tankless, combi-boiler, and heat pump and solar water heaters. The company offers its products under the A. O. Smith, State, Lochinvar, Hague, Water-Right, Master Water, Atlantic Filter, and Water Tec brands. It distributes its products through independent wholesale plumbing distributors, as well as to retail channels consisting of hardware and home center chains, and manufacturer representative firms; and offers Aquasana branded products directly to consumers through e-commerce channels. A. O. Smith Corporation was founded in 1874 and is headquartered in Milwaukee, Wisconsin.