5 Dividend Aristocrats Under $60 You Can Buy in September

2. A. O. Smith Corporation (NYSE:AOS)

Share Price as of September 5: $56.2
Dividend Yield as of September 5: 1.99%

A. O. Smith Corporation (NYSE:AOS) is a Wisconsin-based manufacturer of both residential and commercial water heaters and boilers. The company has been paying dividends to shareholders consistently for the past 82 years with a 28-year streak of dividend growth. Its quarterly dividend stands at $0.28 per share, with a dividend yield of 1.99%, as recorded on September 5.

A. O. Smith Corporation (NYSE:AOS) posted revenue of $966 million in Q2 2022, up 12.3% from the same period last year. The company’s net earnings also grew by 7% to $126.2 million. Its cash from operations stood at $54.4 million and its free cash flow amounted to $23.7 million in the first half of the year. In addition to this, the company had $360 million available in cash and cash equivalents at the end of June 2022.

Following the company’s Q2 results, Citigroup lifted its price target on the stock to $65 with a Neutral rating on the shares.

The number of hedge funds tracked by Insider Monkey owning stakes in A. O. Smith Corporation (NYSE:AOS) stood at 27 in Q2 2022, compared with 38 in the previous quarter. Renaissance Technologies was the company’s leading stakeholder in the second quarter, owning stakes worth over $22.2 million.

LRT Capital Management mentioned A. O. Smith Corporation (NYSE:AOS) in its Q2 2022 investor letter. Here is what the firm has to say:

“A.O. Smith is the largest US manufacturer of residential and commercial water heaters, boilers and water treatment products. The company generates close to $3 billion in annual sales. The majority of the company’s business (73%) is done in North America, with the balance coming from China and India. Approximately 80% of demand is replacing existing heaters and 20% is tied to new construction. The company continues to benefit from a shift towards higher efficiency, but more expensive, tankless heaters.

A.O. Smith generates returns on invested capital in the high teens. The company uses its earnings to consistently grow its dividends and share repurchases. Over the past three years the company’s performance has been hurt by its exposure to China as its business there suffered due to the US-China trade war and poor execution. We believe the China business is back on track and the all-important US business is doing better than ever as housing demand heats up in the US. The company beat earnings estimates over the past several quarters and is currently enjoying very good performance as the hot U.S housing market continues to be strong.¹⁹ A.O. Smith also recently increased its share repurchase authorization.”