A. O. Smith (NYSE:AOS – Get Free Report) and Gibraltar Industries (NASDAQ:ROCK – Get Free Report) are both industrials companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, valuation, profitability, earnings, dividends, analyst recommendations and institutional ownership.
Insider & Institutional Ownership
76.1% of A. O. Smith shares are owned by institutional investors. Comparatively, 98.4% of Gibraltar Industries shares are owned by institutional investors. 0.5% of A. O. Smith shares are owned by company insiders. Comparatively, 0.9% of Gibraltar Industries shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Analyst Recommendations
This is a breakdown of recent ratings and target prices for A. O. Smith and Gibraltar Industries, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| A. O. Smith | 2 | 7 | 1 | 0 | 1.90 |
| Gibraltar Industries | 1 | 1 | 1 | 1 | 2.50 |
A. O. Smith presently has a consensus target price of $66.00, indicating a potential upside of 4.60%. Given A. O. Smith’s higher possible upside, analysts plainly believe A. O. Smith is more favorable than Gibraltar Industries.
Valuation & Earnings
This table compares A. O. Smith and Gibraltar Industries”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| A. O. Smith | $3.83 billion | 2.24 | $546.20 million | $3.60 | 17.53 |
| Gibraltar Industries | $1.14 billion | 1.05 | -$44.39 million | ($5.04) | -7.96 |
A. O. Smith has higher revenue and earnings than Gibraltar Industries. Gibraltar Industries is trading at a lower price-to-earnings ratio than A. O. Smith, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
A. O. Smith has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500. Comparatively, Gibraltar Industries has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500.
Profitability
This table compares A. O. Smith and Gibraltar Industries’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| A. O. Smith | 13.01% | 27.66% | 14.52% |
| Gibraltar Industries | -10.43% | 11.23% | 4.91% |
Summary
A. O. Smith beats Gibraltar Industries on 9 of the 14 factors compared between the two stocks.
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.
About Gibraltar Industries
Gibraltar Industries, Inc. manufactures and provides products and services for the renewable energy, residential, agtech, and infrastructure markets in the United States and internationally. It operates through four segments: Renewables, Residential, Agtech, and Infrastructure. The Renewables segment designs, engineers, manufactures, and installs solar racking and electrical balance of systems for commercial and distributed generation scale solar installations. The Residential segment offers roof and foundation ventilation products and accessories; mail and electronic package solutions, including single mailboxes, cluster style mail and parcel boxes for single and multi-family housing, and electronic package locker systems; roof edgings and flashings; soffits and trims; drywall corner beads; metal roofing and accessories; rain dispersion products comprising gutters and accessories; and exterior retractable awnings. This segment also provides electronic parcel lockers, pipe flashings, and remote-controlled deck awnings and valances for sun protection. The Agtech segment offers growing and processing solutions, including the designing, engineering, manufacturing, construction, maintenance, and support of greenhouses; and indoor growing operations for retail, fruits and vegetables, flowers, cannabis, commercial, institutional and conservatories, and car wash structure applications. The Infrastructure segment offers expansion joints, structural bearings, rubber pre-formed seals and other sealants, elastomeric concrete, and bridge cable protection systems. It serves solar developers, home improvement retailers, wholesalers, distributors, and contractors, as well as institutional and commercial growers of fruit, vegetables, flowers, and plants. Gibraltar Industries, Inc. was founded in 1972 and is headquartered in Buffalo, New York.
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