SafetyMargin.ioSafetyMargin.io
BlogWatchlistCompare
Compare Stocks › AOS vs JNJ

A. O. Smith Corporation (AOS) vs Johnson & Johnson (JNJ)

AOS
A. O. Smith Corporation
$64.54
VS
JNJ
Johnson & Johnson
$237.60

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 95/100 on the Economic Moat Score (Wide Moat), with roic consistency 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.
JNJ
  • ★Johnson & Johnson has maintained ROIC above 10% for 4 consecutive years, suggesting solid business economics.
  • ★Gross margin of 68.1% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
  • ★Johnson & Johnson scores 90/100 on the Economic Moat Score (Wide Moat), with revenue predictability as the strongest competitive dimension.

Risks

AOS
    JNJ
    • ⚠FCF yield of 2.9% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
    • ⚠7 insider sales totaling $58.4M with no purchases in the past 3 months — insiders are reducing their exposure.

    Key Valuation Metrics

    Learn more →
    AOS
    JNJ
    Valuation
    $426.16M
    Free Cash Flow
    $16.63B
    4.77%
    FCF Yield
    2.90%
    16.76
    Trailing P/E
    21.56
    14.86
    Forward P/E
    18.90
    Quality & Moat
    26.34%
    ROIC
    13.63%
    29.40%
    ROE
    32.87%
    38.83%
    Gross Margin
    68.08%
    0.88
    PEG Ratio
    0.44
    Balance Sheet Safety
    0.11
    Debt / Equity
    0.60
    N/A
    Interest Coverage
    N/A
    0.01
    Net Debt / EBITDA
    0.86
    2.17%
    Dividend Yield
    2.19%
    AOS: 6Ties: 2JNJ: 4
    AOSJNJ

    Historical Fundamentals

    Learn more →
    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.

    JNJ

    Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation.

    Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation.

    $1 Retained Earnings Test

    Learn more →
    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
    JNJ
    $0.91
    created per $1 retained over 3 years
    Mediocre Allocator
    Σ Retained
    $40.05B
    Δ Market Cap
    +$36.63B
    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

    Learn more →
    AOS
    26.3% Margin of Safety
    Price is 26.3% below estimated fair value
    Current Price: $64.54
    Fair Value: $87.59
    Strongly undervalued
    Undervalued
    Fairly valued
    Overvalued
    Strongly overvalued
    JNJ
    2.9% Margin of Safety
    Price is 2.9% below estimated fair value
    Current Price: $237.60
    Fair Value: $244.77
    Strongly undervalued
    Undervalued
    Fairly valued
    Overvalued
    Strongly overvalued

    Reverse DCF — Market-Implied Growth

    Learn more →
    AOS

    What growth rate is the market pricing in at $65?

    +5.0%
    Market-Implied Owner Earnings Growth
    Standard FCF implies +8.4%

    The market implies +5.0% Owner Earnings growth, below historical trends — potential opportunity.

    Standard FCF implies a more demanding +8.4%, reflecting heavy growth investment expected to generate future returns.

    JNJ

    What growth rate is the market pricing in at $238?

    +9.3%
    Market-Implied Owner Earnings Growth
    Standard FCF implies +15.8%

    The market implies +9.3% Owner Earnings growth, below historical trends — potential opportunity.

    Standard FCF implies a more demanding +15.8%, reflecting heavy growth investment expected to generate future returns.

    Economic Moat Score

    Learn more →
    AOS
    95/100
    Wide Moat
    70+ Wide · 40-69 Narrow · <40 None

    Wide moat with strength across all dimensions. ROIC Consistency 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.
    JNJ
    90/100
    Wide Moat
    70+ Wide · 40-69 Narrow · <40 None

    Wide moat with strength across all dimensions. Revenue Predictability 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 5 years of fundamental data.

    Forensic Accounting

    Learn more →
    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.
    JNJ
    -2.31
    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

    Learn more →
    AOS
    Insiders 0.4%Institutions 108.0%
    No. of Institutional Holders903
    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.
    JNJ
    Insiders 0.1%Institutions 75.8%Retail & Other 24.2%
    No. of Institutional Holders5,544
    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

    Learn more →
    AOS
    0
    Buys (3M)
    0
    Buys (12M)
    No open market insider purchases found.
    Open market purchases · includes direct & indirect ownership · excludes option exercises
    JNJ
    0
    Buys (3M)
    1
    Buys (12M)
    Total value (12M): $257,688
    MORIKIS JOHN G
    Director
    $257,688
    @ $206.15 · 2025-11-26
    WEINBERGER MARK A
    Director
    $147,220
    @ $147.22 · 2024-12-12
    WOODS EUGENE A
    Director
    $14,553
    @ $145.53 · 2024-04-30
    Open market purchases · includes direct & indirect ownership · excludes option exercises

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

    Insider Selling Activity

    Learn more →
    AOS
    2
    Sells (3M)
    5
    Sells (12M)
    Total value (12M): $3.11M
    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
    HEIDEMAN ROBERT JAMES
    Chief Technology Officer
    $67,357
    @ $65.65 · 2025-02-07
    KARGE DOUGLAS SAMUEL
    Officer
    $27,507
    @ $65.65 · 2025-02-07
    CARVER SAMUEL M
    Officer
    $1.19M
    @ $81.00 · 2024-08-07
    BROWN RONALD DALE
    Director
    $311,071
    @ $85.67 · 2024-07-30
    Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives
    JNJ
    7
    Sells (3M)
    12
    Sells (12M)
    Total value (12M): $101.23M
    DECKER ROBERT J
    Officer
    $1.01M
    @ $247.87 · 2026-02-27
    SCHMID TIMOTHY
    Officer
    $324,763
    @ $245.66 · 2026-02-20
    SCHMID TIMOTHY
    Officer
    $5.53M
    @ $244.33 · 2026-02-18
    WOLK JOSEPH J
    Chief Financial Officer
    $21.77M
    @ $242.80 · 2026-02-17
    SWANSON JAMES D
    Chief Technology Officer
    $15.11M
    @ $243.39 · 2026-02-17
    BROADHURST VANESSA
    Officer
    $1.51M
    @ $243.39 · 2026-02-17
    REED JOHN C
    Officer
    $13.11M
    @ $243.00 · 2026-02-17
    REED JOHN C
    Officer
    $4.19M
    @ $192.71 · 2025-10-17
    TAUBERT JENNIFER L
    Officer
    $10.04M
    @ $177.81 · 2025-09-04
    DUATO JOAQUIN BOIX
    Chief Executive Officer
    $22.55M
    @ $179.21 · 2025-08-22
    WOLK JOSEPH J
    Chief Financial Officer
    $2.98M
    @ $176.91 · 2025-08-15
    REED JOHN C
    Officer
    $3.13M
    @ $163.55 · 2025-07-17
    DECKER ROBERT J
    Officer
    $1.16M
    @ $165.88 · 2025-02-25
    SCHMID TIMOTHY
    Officer
    $62,928
    @ $156.15 · 2025-02-18
    WOLK JOSEPH J
    Chief Financial Officer
    $2.00M
    @ $153.89 · 2025-02-07
    DECKER ROBERT J
    Officer
    $930,113
    @ $165.06 · 2024-08-30
    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

    Learn more →
    AOS
    FearGreed
    😨Fear(36/100)

    "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.
    JNJ
    FearGreed
    😐Neutral(59/100)

    "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.

    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

    Learn more →
    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: Fear (36)
    JNJ
    ⚪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 (59)
    View AOS Full AnalysisView JNJ Full Analysis
    A. O. Smith Corporation (AOS) vs Johnson & Johnson (JNJ) Stock Comparison | SafetyMargin.io