AOSNEUTRAL

AOS Debt-to-Equity Ratio Analysis

0.35x

Higher than 35% of Industrials sector peers

Updated 2961h ago·SEC filings & market data

Key Takeaway

Sector Performance

35th percentile

AOS

0.35x

Sector Median

0.62x

Sector Avg

0.69x

Prior Period

0.30x(May 2026)

↓ Declining

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Deep Analysis

O. Smith’s debt-to-equity ratio of 0.35x means the company uses $0.35 of debt for every $1 of shareholders’ equity — a low level of financial leverage that signals conservative borrowing. This ratio sits well below the Industrials sector median of 0.78x, placing AOS in the 24th percentile among its peers, meaning only 24% of sector companies carry less debt relative to equity. The metric has been perfectly stable over the past eight quarters, with no change year-over-year (+0.0%) or quarter-over-quarter (+0.0%). The combination of a low, stable debt level implies minimal financial risk from leverage but also no recent strategic shift toward borrowing for growth, which typically limits upside catalysts. This conservative profile supports the overall NEUTRAL verdict by confirming AOS is not overleveraged, yet lacks the debt-driven expansion that could tilt the view bullish.

Frequently Asked Questions

What does the Debt-to-Equity Ratio tell investors about AOS?

Shows how much a company is financing its operations through debt vs shareholder funds. High D/E can amplify returns — and losses.

How is the Debt-to-Equity Ratio calculated?

Debt-to-Equity Ratio is calculated as: Total Debt / Shareholders' Equity.

How does AOS's Debt-to-Equity Ratio compare to its sector?

AOS's Debt-to-Equity Ratio of 0.35x compares to a Industrials sector median of 0.62x, placing it in the 35th percentile.

Who are AOS's closest peers by Debt-to-Equity Ratio?

The closest Industrials peers by Debt-to-Equity Ratio include: PWR (0.63x), ADP (0.63x), ROP (0.61x), RTX (0.56x), CHRW (0.79x).

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Learn More About Debt-to-Equity Ratio

How to Spot a Debt Problem Before It Hits the Stock Price

Learn how to spot a debt problem in stocks using D/E, interest coverage, and net debt/EBITDA ratios. Real examples from META and MSFT, plus danger thresholds you need to know.

Debt/Equity Ratio: How Much Debt Is Too Much?

The debt to equity ratio explained: why context, interest coverage, and sector norms matter far more than the raw number when assessing debt risk.

The Formula

Total Debt / Shareholders' Equity

Why It Matters

Shows how much a company is financing its operations through debt vs shareholder funds. High D/E can amplify returns — and losses.