Head-To-Head Comparison: Enersys (NYSE:ENS) versus A. O. Smith (NYSE:AOS)

Enersys (NYSE:ENS) and A. O. Smith (NYSE:AOS) are both industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, profitability, earnings, analyst recommendations, institutional ownership and dividends.

Earnings & Valuation

This table compares Enersys and A. O. Smith”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Enersys	$3.66 billion	1.05	$363.73 million	$8.76	11.65
A. O. Smith	$3.82 billion	2.66	$533.60 million	$3.59	20.18

A. O. Smith has higher revenue and earnings than Enersys. Enersys 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.

Dividends

Enersys pays an annual dividend of $1.05 per share and has a dividend yield of 1.0%. A. O. Smith pays an annual dividend of $1.36 per share and has a dividend yield of 1.9%. Enersys pays out 12.0% of its earnings in the form of a dividend. A. O. Smith pays out 37.9% 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. Enersys has increased its dividend for 2 consecutive years and A. O. Smith has increased 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.

Analyst Ratings

This is a breakdown of current recommendations for Enersys and A. O. Smith, as provided by MarketBeat.

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

Enersys presently has a consensus target price of $118.33, indicating a potential upside of 15.96%. A. O. Smith has a consensus target price of $77.43, indicating a potential upside of 6.85%. Given Enersys’ stronger consensus rating and higher probable upside, analysts plainly believe Enersys is more favorable than A. O. Smith.

Volatility and Risk

Enersys has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500. Comparatively, A. O. Smith has a beta of 1.22, suggesting that its share price is 22% more volatile than the S&P 500.

Insider and Institutional Ownership

94.9% of Enersys shares are owned by institutional investors. Comparatively, 76.1% of A. O. Smith shares are owned by institutional investors. 0.9% of Enersys shares are owned by company insiders. Comparatively, 0.8% of A. O. Smith 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Enersys	9.60%	21.99%	10.24%
A. O. Smith	13.68%	28.42%	16.52%

Summary

A. O. Smith beats Enersys on 10 of the 17 factors compared between the two stocks.

About Enersys

EnerSys engages in the provision of stored energy solutions for industrial applications worldwide. It operates in four segments: Energy Systems, Motive Power, Specialty, and New Ventures. The Energy Systems segment offers uninterruptible power systems (UPS) applications for computer and computer-controlled systems, as well as telecommunications systems; switchgear and electrical control systems used in industrial facilities and electric utilities, large-scale energy storage, and energy pipelines; integrated power solutions and services to broadband, telecom, data center, and renewable and industrial customers; and thermally managed cabinets and enclosures for electronic equipment and batteries. The Motive Power segment provides power solutions for electric industrial forklifts used in manufacturing, warehousing, and other material handling applications, as well as automated guided vehicles, mining equipment, and diesel locomotive starting and other rail equipment. The Specialty offers batteries for starting, lighting, and ignition applications in automotive and over-the-road trucks; and energy solutions for satellites, spacecraft, commercial aircraft, military land vehicles, aircraft, submarines, ships, and other tactical vehicles, as well as medical devices and equipment. The New Venture segment provides energy storage and management systems for demand charge reduction, utility back-up power, and dynamic fast charging for electric vehicles. The company also offers battery chargers, power equipment, battery accessories, and outdoor cabinet enclosures, as well as related after-market and customer-support services for industrial batteries. It sells its products through a network of distributors, independent representatives, and internal sales forces. The company was formerly known as Yuasa, Inc. and changed its name to EnerSys in January 2001. EnerSys was founded in 1991 and is headquartered in Reading, Pennsylvania.

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.