AOS

A dividend that grows faster than inflation turns a modest starting yield into a paycheck that keeps getting bigger, and these three Dividend Aristocrats are raising their payouts at a pace most income stocks can't keep up with.

A. O. Smith NYSE: AOS reported third-quarter sales of $941 million, essentially unchanged from a year earlier, and earnings per share of $0.93, while outlining plans to sell a majority interest in its China business and sharpen its focus on North American water-related markets.

A. O. Smith beats third-quarter earnings estimates as boiler growth and pricing benefits offset weaker water heater demand, while its China divestiture reshapes its 2026 outlook.

While the top- and bottom-line numbers for A.O. Smith (AOS) give a sense of how the business performed in the quarter ended September 2026, it could be worth looking at how some of its key metrics compare to Wall Street estimates and year-ago values.

A.O. Smith (AOS) came out with quarterly earnings of $0.93 per share, beating the Zacks Consensus Estimate of $0.9 per share. This compares to earnings of $0.94 per share a year ago.

Third Quarter 2026 Highlights (Comparisons are year-over-year ("YoY"), unless otherwise noted) Sales of $941 million; net earnings of $126 million and diluted earnings per share (EPS) of $0.93 North America segment sales of $761.6 million increased 3% driven by Leonard Valve acquisition sales, 13% boiler sales growth and the benefits of pricing actions, partially offset by lower residential water heater volumes Rest of World segment sales of $192.8 million decreased 7%, reflecting continued weakness in China's consumer appliance market Year-to-date operating cash flow was $429 million and free cash flow increased 4% to $396 million Concluded China strategic assessment with definitive agreements, announced October 27, under which CPE will acquire an 81% interest in the Company's China business; with A. O. Smith retaining a 19% stake and long-term brand license 2026 full year guidance has been updated to exclude the China business for all of 2026: Net sales growth, excluding China, of approximately 4% Adjusted EPS¹, excluding China, of between $3.42 and $3.52 1 Excludes full year North America water treatment estimated pre-tax restructuring and impairment expenses of approximately $20 million.

Dividend Aristocrats underperformed SPY in September but rebounded sharply in October, narrowing the YTD gap. NOBL and the average Aristocrat have YTD returns of 13.13% and 13.35%, trailing SPY's 14.15%. Dividend growth among Aristocrats accelerated, with the 2026 average increase now at 4.55%, bolstered by recent double-digit hikes.

AOS gears up for Q3 earnings with modest revenue growth expected, while weak China demand, rising costs and North American strength shape its outlook.

I rank all 69 S&P 500 Dividend Aristocrats by my 9F Quality Scores, segmenting them into undervalued, fairly valued, and overvalued groups. My consensus fair value estimates, blending up to 40 data points per stock, highlight 12 undervalued and 18 fairly valued Aristocrats, with 39 currently overvalued. Investment candidates vary by style: ADP, BRO, and NDSN for growth; NEE for total return; PEP and O for income; CAT and GWW for past performance.

A.O. Smith (AOS) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.