Reviewing A. O. Smith (NYSE:AOS) & Jewett-Cameron Trading (NASDAQ:JCTC)

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

Analyst Ratings

This is a breakdown of current ratings and price targets for Jewett-Cameron Trading and A. O. Smith, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Jewett-Cameron Trading	1	0	0	0	1.00
A. O. Smith	2	5	2	0	2.00

A. O. Smith has a consensus target price of $67.75, indicating a potential upside of 17.95%. Given A. O. Smith’s stronger consensus rating and higher probable upside, analysts clearly believe A. O. Smith is more favorable than Jewett-Cameron Trading.

Valuation & Earnings

This table compares Jewett-Cameron Trading and A. O. Smith”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Jewett-Cameron Trading	$39.41 million	0.26	-$4.13 million	($2.35)	-1.25
A. O. Smith	$3.83 billion	2.04	$546.20 million	$3.60	15.96

A. O. Smith has higher revenue and earnings than Jewett-Cameron Trading. Jewett-Cameron Trading 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

Jewett-Cameron Trading has a beta of 0.36, suggesting that its stock price is 64% less volatile than the S&P 500. Comparatively, A. O. Smith has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500.

Institutional and Insider Ownership

26.0% of Jewett-Cameron Trading shares are owned by institutional investors. Comparatively, 76.1% of A. O. Smith shares are owned by institutional investors. 1.3% of Jewett-Cameron Trading shares are owned by insiders. Comparatively, 0.5% of A. O. Smith shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Jewett-Cameron Trading and A. O. Smith’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Jewett-Cameron Trading	-20.94%	-38.35%	-29.29%
A. O. Smith	13.15%	27.88%	15.21%

Summary

A. O. Smith beats Jewett-Cameron Trading on 13 of the 14 factors compared between the two stocks.

About Jewett-Cameron Trading

Jewett-Cameron Trading Company Ltd. is a supplier of `Value-added` building materials to major home improvement center chains in the western United States. The Company concentrates on the residential repair and remodeling segment of the building materials industry.

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.