MILWAUKEE – A. O. Smith Corporation (NYSE: AOS), a global manufacturer of water heating equipment and boilers, announced today a 6% increase in its quarterly cash dividend rate, which will now be $0.34 per share. This adjustment applies to both the company’s Common Stock and Class A Common Stock.
The new dividend is slated for payment on November 15 to shareholders who are on record as of October 31, 2024. Kevin J. Wheeler, chairman and chief executive officer of A. O. Smith, commented on the dividend increase, asserting it as a reflection of the company’s dedication to its capital allocation strategy that emphasizes returning capital to shareholders. Wheeler highlighted the company’s consistent performance, noting, “We have increased our dividend each year for over 30 years.”
Celebrating 150 years of operation, A. O. Smith Corporation is recognized for its application of innovative technology and energy-efficient solutions in its product offerings. The company’s portfolio includes residential and commercial water heating equipment, boilers, and water treatment products, with a presence in markets around the world.
This announcement is based on a press release statement from A. O. Smith Corporation. The company’s commitment to shareholder returns is underscored by a five-year compound annual growth rate of approximately 8% in its dividend rate. A. O. Smith’s approach to business and shareholder engagement is emblematic of its longstanding history and market presence, as it continues to uphold a strategy that supports consistent investor returns.
In other recent news, A.O. Smith Corporation reported record-breaking sales for the second quarter, reaching $1 billion with earnings per share of $1.06. The company’s North American water heater and boiler segments witnessed a significant surge in sales, while the China market experienced modest growth. A.O. Smith’s acquisition of Pureit is anticipated to significantly enhance its market presence in South Asia, with the company expressing optimism about its growth prospects in India and its boiler business.
In further developments, the company reaffirmed its 2024 sales growth guidance of 3% to 5% and expects its North America segment margin to be around 25%. Despite a weak consumer demand in China, the company projects 8% to 10% growth in its boiler sales and North America water treatment sales. The company also anticipates a double-digit sales growth in India and a significant increase in its South Asia market presence through the Pureit acquisition.
However, A.O. Smith anticipates a negative currency translation impact of around 2% for the year. The company is also set to launch tankless water heaters in North America, with plans for local manufacturing. The company forecasts a 25% to 30% growth in their product line over the next few years. These are among the recent developments for A.O. Smith Corporation.
InvestingPro Insights
A. O. Smith Corporation’s recent dividend increase aligns with its strong financial position and commitment to shareholder returns. According to InvestingPro data, the company’s dividend yield stands at 1.45%, with a dividend growth rate of 6.67% over the last twelve months as of Q2 2024. This consistent growth is further supported by an InvestingPro Tip, which highlights that A. O. Smith has raised its dividend for 15 consecutive years.
The company’s solid financial footing is evident in its balance sheet strength. An InvestingPro Tip reveals that A. O. Smith holds more cash than debt, indicating a robust liquidity position. This financial prudence is reflected in the company’s market performance, with a one-year price total return of 33.15% as of the latest data.
A. O. Smith’s profitability metrics are equally impressive. The company boasts a gross profit margin of 38.35% and an operating income margin of 19.08% for the last twelve months as of Q2 2024. These figures underscore the company’s operational efficiency and ability to generate strong returns for shareholders.
For investors seeking more comprehensive insights, InvestingPro offers 11 additional tips for A. O. Smith, providing a deeper understanding of the company’s financial health and market position.
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