A. O. Smith vs Fortune Brands Innovations

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KIRA’s take AI analyst

I put A. O. Smith and Fortune Brands Innovations side by side, using each one’s latest annual report. Here is what stands out:

Fortune Brands Innovations is the larger business, with $4.5B of revenue in fiscal 2025 against $3.8B for A. O. Smith.
A. O. Smith grew revenue faster (0.3%, against −3.2%).
A. O. Smith kept more of each dollar of sales as operating profit (19.0% operating margin, against 11.6%).
A. O. Smith turned more of its sales into free cash flow (14.3% FCF margin, against 8.2%).
A. O. Smith earned a higher return on the capital invested in it (30.7%, against 7.7%).
Investors pay more for each dollar of Fortune Brands Innovations’s earnings: a P/E of 34.7x against 17.2x for A. O. Smith.

Who comes out ahead

Of the 11 measures where higher (or lower) is clearly better, how many each company leads.

A. O. Smith

AOS

9/11

Revenue growth5-year growthOperating marginNet marginFCF marginReturn on capitalReturn on equityPiotroski F-scoreNet debt / EBITDA

Fortune Brands Innovations

FBIN

2/11

Gross marginShare count change

Side by side

Best in the row

Latest fiscal year	AOS FY25	FBIN FY25
Size
Market cap	$8.5B	$5.1B
Revenue	$3.8B	$4.5B
Free cash flow	$546M	$367M
Net income	$546M	$299M
Growth
Revenue growth	0.3%	−3.2%
5-year growth	5.8%	4.3%
Share count change	−3.5%	−3.6%
Profitability
Gross margin	38.8%	44.6%
Operating margin	19.0%	11.6%
Net margin	14.3%	6.7%
FCF margin	14.3%	8.2%
Return on capital	30.7%	7.7%
Return on equity	29.2%	12.4%
Balance sheet
Net debt	−$38.2M	$2.3B
Net debt / EBITDA	−0.1x	3.2x
Dividends and buybacks	$597M	$368M
Valuation & quality
P/E	17.2x	34.7x
Piotroski F-score	7	6

Ten years

Revenue

FY16

AOS $2.7B

FBIN $5.0B

FY17

AOS $3.0B

FBIN $5.3B

FY18

AOS $3.2B

FBIN $5.5B

FY19

AOS $3.0B

FBIN $5.8B

FY20

AOS $2.9B

FBIN $3.6B

FY21

AOS $3.5B

FBIN $4.8B

FY22

AOS $3.8B

FBIN $4.7B

FY23

AOS $3.9B

FBIN $4.6B

FY24

AOS $3.8B

FBIN $4.6B

FY25

AOS $3.8B

FBIN $4.5B

FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25

AOS FBIN

Operating margin

FY16

AOS 19.2%

FBIN 12.4%

FY17

AOS 19.3%

FBIN 12.9%

FY18

AOS 19.2%

FBIN 10.9%

FY19

AOS 17.7%

FBIN 12.1%

FY20

AOS 17.4%

FBIN 15.7%

FY21

AOS 19.3%

FBIN 16.9%

FY22

AOS 9.6%

FBIN 16.4%

FY23

AOS 19.4%

FBIN 13.3%

FY24

AOS 18.5%

FBIN 16.0%

FY25

AOS 19.0%

FBIN 11.6%

FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25

AOS FBIN

Free cash flow

FY16

AOS $366M

FBIN $501M

FY17

AOS $232M

FBIN $435M

FY18

AOS $364M

FBIN $454M

FY19

AOS $392M

FBIN $505M

FY20

AOS $505M

FBIN $675M

FY21

AOS $566M

FBIN $475M

FY22

AOS $321M

FBIN $320M

FY23

AOS $598M

FBIN $799M

FY24

AOS $474M

FBIN $475M

FY25

AOS $546M

FBIN $367M

FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25

AOS FBIN

Return on capital

FY16

AOS 34.2%

FBIN 12.7%

FY17

AOS 28.4%

FBIN 14.0%

FY18

AOS 38.6%

FBIN 10.1%

FY19

AOS 30.8%

FBIN 11.1%

FY20

AOS 29.3%

FBIN 9.3%

FY21

AOS 39.8%

FBIN 11.7%

FY22

AOS 24.1%

FBIN 12.0%

FY23

AOS 35.2%

FBIN 10.3%

FY24

AOS 31.6%

FBIN 11.7%

FY25

AOS 30.7%

FBIN 7.7%

FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25

AOS FBIN

Each company's latest fiscal year; fiscal years end in different months. The best value in each row is highlighted where higher (or lower) is clearly better. Not investment advice.