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A. O. Smith Corporation (AOS) vs Alphabet Inc. (GOOGL): Which Is the Better Buy in 2026?

As of 2026-11-01, AOS is fairly valued at $63, with a DCF intrinsic value of $74 and a margin of safety of 15%. GOOGL is overvalued at $280, with an intrinsic value of $8 and a margin of safety of -3448%. Of the two, AOS has the wider margin of safety.

AOS
A. O. Smith Corporation
$63.07
VS
GOOGL
Alphabet Inc.
$279.84

Rewards

AOS
  • ★A. O. Smith Corporation has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
  • ★A. O. Smith Corporation scores 93/100 on the Economic Moat Score (Wide Moat), with margin stability as the strongest competitive dimension.
  • ★Free cash flow has grown at a 19.4% CAGR over the past 4 years, demonstrating strong earnings power growth.
GOOGL
  • ★Alphabet Inc. has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
  • ★Gross margin of 60.9% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
  • ★Alphabet Inc. scores 89/100 on the Economic Moat Score (Wide Moat), with roic consistency as the strongest competitive dimension.

Risks

AOS
  • ⚠FCF yield of 5.1% suggests reasonable valuation assuming continued moderate growth.
GOOGL

    Key Valuation Metrics

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    AOS
    GOOGL
    Valuation
    $430.50M
    Free Cash Flow
    $-1.16B
    5.08%
    FCF Yield
    -0.03%
    17.62
    Trailing P/E
    14.61
    16.74
    Forward P/E
    18.49
    Quality & Moat
    22.05%
    ROIC
    14.30%
    26.97%
    ROE
    44.29%
    38.62%
    Gross Margin
    60.86%
    1.51
    PEG Ratio
    0.98
    Balance Sheet Safety
    0.26
    Net Debt / Equity
    Net cash
    N/A
    Interest Coverage
    N/A
    0.61
    Net Debt / EBITDA
    -0.62
    2.41%
    Dividend Yield
    0.31%
    AOS: 5Ties: 1GOOGL: 6
    AOSGOOGL

    Historical Fundamentals

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    AOS

    Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.

    GOOGL

    Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.

    Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.

    $1 Retained Earnings Test

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    AOS
    $0.57
    created per $1 retained over 3 years
    Mediocre Allocator
    Σ Retained
    $1.07B
    Δ Market Cap
    +$612.2M
    Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
    > $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
    GOOGL
    $9.18
    created per $1 retained over 3 years
    Exceptional Value Creator
    Σ Retained
    $288.67B
    Δ Market Cap
    +$2.65T
    Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
    > $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer

    Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
    > $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer

    Discounted Cash Flow (DCF) Analysis

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    AOS
    15.2% Margin of Safety
    Price is 15.2% below estimated fair value
    Current Price: $63.07
    Fair Value: $74.34
    Strongly undervalued
    Undervalued
    Fairly valued
    Overvalued
    Strongly overvalued
    GOOGL
    3447.8% Overvalued
    Price is 3447.8% above estimated fair value
    Current Price: $279.84
    Fair Value: $7.89
    Strongly undervalued
    Undervalued
    Fairly valued
    Overvalued
    Strongly overvalued

    Reverse DCF — Market-Implied Growth

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    AOS

    What growth rate is the market pricing in at $63?

    +4.7%
    Market-Implied Owner Earnings Growth
    Standard FCF implies +8.2%

    The market implies +4.7% Owner Earnings growth, below historical trends — potential opportunity.

    Standard FCF implies a more demanding +8.2%, reflecting heavy growth investment expected to generate future returns.

    GOOGL

    Requires positive FCF to compute implied growth rate.

    Economic Moat Score

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    AOS
    93/100
    Wide Moat
    70+ Wide · 40-69 Narrow · <40 None

    Wide moat with strength across all dimensions. Margin Stability is the standout factor.

    Composite score measuring competitive advantage durability across four dimensions: returns above cost of capital, pricing power stability, revenue predictability, and capital efficiency. Based on 4 years of fundamental data.
    GOOGL
    89/100
    Wide Moat
    70+ Wide · 40-69 Narrow · <40 None

    Wide moat driven primarily by roic consistency. Reinvestment Efficiency is the area most vulnerable to competitive pressure.

    Composite score measuring competitive advantage durability across four dimensions: returns above cost of capital, pricing power stability, revenue predictability, and capital efficiency. Based on 4 years of fundamental data.

    Forensic Accounting

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    AOS
    -2.50
    Unlikely Manipulator
    Above -1.78 = likely manipulator · -2.22 to -1.78 = grey zone

    M-Score Trend

    Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
    GOOGL
    -2.92
    Unlikely Manipulator
    Above -1.78 = likely manipulator · -2.22 to -1.78 = grey zone

    M-Score Trend

    Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.

    Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.

    Ownership Breakdown

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    AOS
    Insiders 0.5%Institutions 119.2%
    No. of Institutional Holders891
    High insider ownership aligns management incentives with shareholders — a key signal in Buffett-style analysis. Institutional concentration can indicate smart-money conviction but also crowding risk.
    GOOGL
    Insiders 1.6%Institutions 80.8%Retail & Other 17.6%
    No. of Institutional Holders7,451
    High insider ownership aligns management incentives with shareholders — a key signal in Buffett-style analysis. Institutional concentration can indicate smart-money conviction but also crowding risk.

    High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.

    Insider Buying Activity

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    AOS
    0
    Buys (3M)
    0
    Buys (12M)
    No open market insider purchases found.
    Open market purchases · includes direct & indirect ownership · excludes option exercises
    GOOGL
    0
    Buys (3M)
    0
    Buys (12M)
    No open market insider purchases found.
    Open market purchases · includes direct & indirect ownership · excludes option exercises

    Open market purchases · includes direct & indirect ownership · excludes option exercises.

    Insider Selling Activity

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    AOS
    0
    Sells (3M)
    2
    Sells (12M)
    Total value (12M): $110,565
    SCHUH DARRELL W
    Officer
    $82,126
    @ $74.39 · 2026-03-04
    SCHUH DARRELL W
    Officer
    $28,439
    @ $79.88 · 2026-02-13
    STERN JAMES F
    General Counsel
    $1.24M
    @ $71.24 · 2025-08-07
    WHEELER KEVIN J.
    Officer and Director
    $1.58M
    @ $71.26 · 2025-07-30
    SMITH MARK D
    Director
    $171,264
    @ $71.36 · 2025-07-29
    KARGE DOUGLAS SAMUEL
    Officer
    $27,507
    @ $65.65 · 2025-02-07
    HEIDEMAN ROBERT JAMES
    Chief Technology Officer
    $67,357
    @ $65.65 · 2025-02-07
    Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives
    GOOGL
    0
    Sells (3M)
    0
    Sells (12M)
    No open market insider sales found.
    Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives

    Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.

    🎭 Mr. Market's Mood

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    AOS
    FearGreed
    😐Neutral(46/100)

    "Market is pricing this stock without strong emotion in either direction"

    Composite sentiment score based on 6 market signals. Inspired by Buffett's "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
    GOOGL
    FearGreed
    😨Fear(23/100)

    "Market is pessimistic — investigate whether fears are temporary or structural"

    Composite sentiment score based on 6 market signals. Inspired by Buffett's "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.

    Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.

    ⚖️ Buffett Signal

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    AOS
    ⚪Awaiting DCF Data

    The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.

    DCF Margin of Safety: N/AMr. Market's Mood: Neutral (46)
    GOOGL
    ⚪Awaiting DCF Data

    The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.

    DCF Margin of Safety: N/AMr. Market's Mood: Fear (23)
    View AOS Full AnalysisView GOOGL Full Analysis

    Frequently Asked Questions: AOS vs GOOGL

    Is A. O. Smith Corporation or Alphabet Inc. more undervalued in 2026?▼

    Based on our discounted cash flow model, AOS trades at a 15.2% margin of safety (intrinsic value $74 vs. price $63), compared to GOOGL's -3447.8% margin of safety (intrinsic $8 vs. $280).

    Which stock has a wider economic moat, A. O. Smith Corporation or Alphabet Inc.?▼

    AOS scores 93/100 (Wide moat), while GOOGL scores 89/100 (Wide moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.

    Is Alphabet Inc. in financial distress?▼

    GOOGL's Altman Z-Score of 2.4 places it in the Grey zone, signaling elevated bankruptcy risk. AOS scores 8.2 (Safe zone). The Altman Z-Score is a five-factor model that predicts insolvency within two years; scores below 1.81 indicate significant distress.

    Which company has better free cash flow, A. O. Smith Corporation or Alphabet Inc.?▼

    A. O. Smith Corporation (AOS) generates a 5.1% free cash flow yield, compared to Alphabet Inc.'s -0.0%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.

    Which stock has higher return on invested capital, A. O. Smith Corporation or Alphabet Inc.?▼

    AOS earns 22.0% ROIC versus GOOGL's 14.3%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.

    Which dividend is safer, A. O. Smith Corporation's or Alphabet Inc.'s?▼

    AOS's dividend earns a safety score of 94/100 (Very Safe), compared to GOOGL's 88/100 (Very Safe). AOS has raised its dividend for 3 consecutive years.