A. O. Smith Corporation Declares Quarterly Dividend: A Signal of Financial Stability

MILWAUKEE, WI – July 7, 2025 – A. O. Smith Corporation (NYSE: AOS), a leading global manufacturer of water heaters and boilers, today announced that its Board of Directors has declared a regular quarterly cash dividend of $0.34 per share. This dividend will be paid on both the company's Common Stock and Class A Common Stock, underscoring the company's consistent commitment to returning value to its shareholders.

Dividend Details and Historical Context

The $0.34 per share dividend represents a continuation of A. O. Smith's long-standing practice of distributing a portion of its earnings to investors. The company has a robust history of dividend payments, often increasing its payout over time, which is a strong indicator of financial health and a stable business model. For income-focused investors, a consistent dividend payer like A. O. Smith can be an attractive component of a diversified portfolio, providing a steady stream of income regardless of market volatility.

This latest declaration follows a pattern of predictable dividend announcements, typically made quarterly. Investors often view such consistency as a sign of management's confidence in future earnings and cash flow generation. The dividend yield, calculated by dividing the annual dividend per share by the stock's current price, is a key metric for investors evaluating the income potential of AOS shares.

Market Context and Industry Position

A. O. Smith operates in the essential home and commercial building products sector, specifically in water heating and treatment. This industry is characterized by relatively stable demand, driven by new construction, replacement cycles, and increasing global demand for clean water and energy-efficient solutions. The company's strong brand recognition, extensive distribution network, and focus on innovation in areas like smart water heaters and advanced filtration systems position it well within this market.

Despite potential economic headwinds, the necessity of hot water and clean water ensures a baseline demand for A. O. Smith's products. Furthermore, the company's global footprint, with significant operations in North America, China, and India, diversifies its revenue streams and mitigates regional economic risks. The Chinese market, in particular, has been a significant growth driver for A. O. Smith in recent years, though it also presents unique competitive dynamics.

Financial Implications and Investor Insights

The declaration of a regular quarterly dividend signals that A. O. Smith's management believes the company has sufficient cash flow and profitability to sustain these payouts. For investors, this can imply several things:

• Financial Stability: A consistent dividend history often points to a company with strong balance sheets and predictable earnings.
• Shareholder Return Focus: It demonstrates a commitment to returning capital to shareholders, which can enhance total shareholder return, especially for long-term holders.
• Confidence in Future Performance: Management's decision to maintain or increase dividends often reflects optimism about future operational performance and market conditions.

Investors considering A. O. Smith should look beyond just the dividend yield. Analyzing the company's dividend payout ratio (dividends per share divided by earnings per share) can indicate the sustainability of the dividend. A lower payout ratio suggests more room for future dividend growth and less risk of a cut. Furthermore, examining the company's free cash flow generation is crucial, as dividends are ultimately paid from cash.

Outlook and Strategic Direction

A. O. Smith continues to invest in research and development to bring innovative and energy-efficient products to market, aligning with global trends towards sustainability and smart home technologies. These strategic investments, coupled with disciplined capital allocation, are expected to support future earnings growth and, consequently, the company's ability to maintain and potentially grow its dividend. The company's focus on operational efficiency and supply chain resilience also plays a critical role in ensuring consistent profitability.

In conclusion, A. O. Smith's declaration of its regular quarterly dividend reinforces its image as a financially sound company with a commitment to its shareholders. For investors seeking a blend of stability, market leadership, and consistent income, AOS remains a noteworthy consideration in the industrial manufacturing sector.