Compare Stocks › AOS vs ORCL

A. O. Smith Corporation (AOS) vs Oracle Corporation (ORCL): Which Is the Better Buy in 2026?

As of 2026-06-19, AOS is undervalued at $58, with a DCF intrinsic value of $100 and a margin of safety of 42%. ORCL is undervalued at $184, with an intrinsic value of $285 and a margin of safety of 35%. Of the two, AOS has the wider margin of safety.

AOS

A. O. Smith Corporation

$58.22

ORCL

Oracle Corporation

$184.29

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.

ORCL

★Oracle Corporation has maintained ROIC above 10% for 4 consecutive years, suggesting solid business economics.
★Gross margin of 65.8% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
★Return on equity has consistently exceeded 20% over 3 years, indicating efficient use of shareholder capital.

Risks

AOS

⚠FCF yield of 6.2% suggests reasonable valuation assuming continued moderate growth.

ORCL

⚠Despite buyback spending, shares outstanding increased in 3 out of 4 years — stock-based compensation is offsetting repurchases.
⚠High leverage (2.89x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.
⚠Insiders have sold $2.6M worth of stock in the past 3 months — significant insider liquidation.

Key Valuation Metrics

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AOS

ORCL

Valuation

$495.61M

Free Cash Flow

$-20.34B

6.18%

FCF Yield

-3.84%

15.53

Trailing P/E

31.56

13.96

Forward P/E

16.89

Quality & Moat

20.33%

ROIC

9.68%

28.27%

ROE

53.38%

38.76%

Gross Margin

65.82%

1.58

PEG Ratio

1.06

Balance Sheet Safety

0.24

Net Debt / Equity

2.89

N/A

Interest Coverage

N/A

0.57

Net Debt / EBITDA

3.92

2.36%

Dividend Yield

1.09%

AOS: 8Ties: 1ORCL: 3

AOSORCL

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.

ORCL

$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

ORCL

$17.69

created per $1 retained over 3 years

Exceptional Value Creator

Σ Retained

$18.61B

Δ Market Cap

+$329.28B

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

42.0% Margin of Safety

Price is 42.0% below estimated fair value

Current Price: $58.22

Strongly undervalued

Undervalued

Fairly valued

Overvalued

Strongly overvalued

Fair Value: $100.40

Strongly undervalued

Undervalued

Fairly valued

Overvalued

Strongly overvalued

ORCL

35.4% Margin of Safety

Price is 35.4% below estimated fair value

Current Price: $184.29

Strongly undervalued

Undervalued

Fairly valued

Overvalued

Strongly overvalued

Fair Value: $285.39

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 $58?

+3.9%

Market-Implied Owner Earnings Growth

Standard FCF implies +5.6%

The market implies +3.9% Owner Earnings growth, below historical trends — potential opportunity.

Standard FCF implies a more demanding +5.6%, reflecting heavy growth investment expected to generate future returns.

ORCL

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.

ORCL

68/100

Narrow Moat

70+ Wide · 40-69 Narrow · <40 None

Narrow moat with revenue predictability as the key competitive advantage. Improving reinvestment efficiency would strengthen the moat.

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.

ORCL

-2.57

Unlikely Manipulator

Above -1.78 = likely manipulator · -2.22 to -1.78 = grey zone

M-Score Trend

Ownership Breakdown

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AOS

Insiders 0.5%Institutions 109.9%

No. of Institutional Holders905

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.

ORCL

Insiders 40.5%Institutions 44.0%Retail & Other 15.5%

No. of Institutional Holders4,512

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

Buys (3M)

Buys (12M)

No open market insider purchases found.

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

ORCL

Buys (3M)

Buys (12M)

Total value (12M): $112,258

FAIRHEAD RONA ALISON

Director

$112,258

@ $233.87 · 2025-07-07

MOORMAN CHARLES W IV

Director

$947,913

@ $172.35 · 2025-02-12

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

Sells (3M)

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

KARGE DOUGLAS SAMUEL

Officer

$27,507

@ $65.65 · 2025-02-07

HEIDEMAN ROBERT JAMES

Chief Technology Officer

$67,357

@ $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

ORCL

Sells (3M)

Sells (12M)

Total value (12M): $1.89B

LEVEY STUART A

Officer

$2.64M

@ $176.19 · 2026-04-16

MAGOUYRK CLAYTON M

Chief Executive Officer

$1.55M

@ $155.23 · 2026-02-09

KEHRING DOUGLAS A

Officer

$6.82M

@ $194.89 · 2026-01-15

HURA MARK

Officer

$2.95M

@ $196.89 · 2025-12-24

SELIGMAN NAOMI O

Director

$437,064

@ $196.61 · 2025-12-23

MAGOUYRK CLAYTON M

Chief Executive Officer

$1.93M

@ $192.52 · 2025-12-19

SMITH MARIA

Officer

$2.80M

@ $280.31 · 2025-10-23

MAGOUYRK CLAYTON M

Chief Executive Officer

$11.07M

@ $276.64 · 2025-10-21

LEVEY STUART A

Officer

$5.93M

@ $300.00 · 2025-10-10

SELIGMAN NAOMI O

Director

$641,958

@ $288.91 · 2025-09-26

SICILIA MICHAEL D

Officer

$10.87M

@ $321.16 · 2025-09-23

SICILIA MICHAEL D

Officer

$5.12M

@ $313.60 · 2025-09-16

MAGOUYRK CLAYTON M

President

$6.31M

@ $297.11 · 2025-09-12

SICILIA MICHAEL D

Officer

$4.04M

@ $254.48 · 2025-08-05

SELIGMAN NAOMI O

Director

$770,656

@ $233.32 · 2025-07-16

SMITH MARIA

Officer

$2.33M

@ $232.99 · 2025-07-03

CATZ SAFRA A

Chief Executive Officer

$267.24M

@ $212.01 · 2025-06-27

CATZ SAFRA A

Chief Executive Officer

$794.64M

@ $212.50 · 2025-06-26

CATZ SAFRA A

Chief Executive Officer

$764.01M

@ $206.77 · 2025-06-23

CONRADES GEORGE HENRY

Director

$1.74M

@ $213.49 · 2025-06-17

MAGOUYRK CLAYTON M

Officer

$3.21M

@ $214.10 · 2025-06-17

SELIGMAN NAOMI O

Director

$428,562

@ $149.53 · 2025-05-05

SELIGMAN NAOMI O

Director

$291,620

@ $145.81 · 2025-04-02

CATZ SAFRA A

Chief Executive Officer

$705.46M

@ $185.40 · 2025-01-24

SMITH MARIA

Officer

$1.04M

@ $165.00 · 2024-09-16

ELLISON LAWRENCE JOSEPH

Chief Technology Officer

$322.05M

@ $143.13 · 2024-07-16

SCREVEN EDWARD LLOYD

Officer

$60.58M

@ $141.91 · 2024-07-10

SCREVEN EDWARD LLOYD

Officer

$5.22M

@ $140.19 · 2024-06-26

SCREVEN EDWARD LLOYD

Officer

$34.04M

@ $144.30 · 2024-06-20

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

😨Fear(39/100)

"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.

ORCL

😨Fear(32/100)

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

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: Fear (39)

ORCL

⚪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 (32)

View AOS Full Analysis View ORCL Full Analysis

Frequently Asked Questions: AOS vs ORCL

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

Based on our discounted cash flow model, AOS trades at a 42.0% margin of safety (intrinsic value $100 vs. price $58), compared to ORCL's 35.4% margin of safety (intrinsic $285 vs. $184).

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

AOS scores 93/100 (Wide moat), while ORCL scores 68/100 (Narrow moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.

Is Oracle Corporation in financial distress?▼

ORCL's Altman Z-Score of 2.7 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 Oracle Corporation?▼

A. O. Smith Corporation (AOS) generates a 6.2% free cash flow yield, compared to Oracle Corporation's -3.8%. 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 Oracle Corporation?▼

AOS earns 20.3% ROIC versus ORCL's 9.7%. 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 Oracle Corporation's?▼

AOS's dividend earns a safety score of 94/100 (Very Safe), compared to ORCL's 79/100 (Safe). AOS has raised its dividend for 3 consecutive years.