AOS vs ZWS: Which Is the Better Buy in 2026?
Last updated September 2026
Short answer
AOS and ZWS are similarly sized, but AOS trades noticeably cheaper on forward earnings (14.30x vs 22.94x): the market is paying up for ZWS's profile and pricing AOS more conservatively, or for faster growth. Which you prefer comes down to the drivers you believe, and whether adding either over-concentrates what you already own.
AOS vs ZWS: the tie-breaker metrics
Same yardstick, side by side (as of September 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.
| Metric | AOS | ZWS | What it tells you |
|---|---|---|---|
| Market cap | $7.95B | $7.74B | Size. The larger name is the incumbent; the smaller has more room to grow and more to prove. |
| Forward P/E | 14.30 | 22.94 | Valuation on next year's expected earnings, the same yardstick for both. Lower is cheaper for that growth; higher means the market is paying up. |
| Trailing P/E | 16.29 | 28.97 | Valuation on the last 12 months. A big drop from trailing to forward means the market expects earnings to jump, so more growth is already in the price. |
| Beta | 1.16 | 0.78 | Volatility vs the market. Above 1 swings harder than the index; below 1 is steadier. Higher beta means bigger drawdowns to hold through. |
| Price vs 52-week range | 16% of range | 30% of range | Where today's price sits between the 52-week low and high. Near the high is momentum with less margin of safety; near the low is out of favor or a discount, depending on why. |
| Price / book | 4.32 | 4.67 | How much you pay over book value. Very high can signal an asset-light, high-return business or a rich price. |
Reading it: AOS is the cheaper of the two on forward earnings, but cheaper is not the same as better. Pair the valuation with growth (how far the forward P/E sits below the trailing P/E) and risk (beta) before you decide.
Before you buy: how AOS and ZWS affect your concentration
The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. AOS and ZWS share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.
This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined AOS and ZWS exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.
What does A. O. Smith Corporation (AOS) do?
A. O. Smith is a Milwaukee-based manufacturer of water heating and water treatment products. Its core business is residential and commercial water heaters and boilers, where it is one of the top players in North America alongside Rheem and Bradford White, plus a faster-growing line of water treatment and filtration products. The North America segment drives roughly 78 percent of sales, and the Rest of World segment (around 22 percent, a majority in China, with a rising India contribution via the Pureit brand) is the international lever. Much of North American demand is non-discretionary replacement of failed units, which gives the revenue base a defensive, recurring quality.
What does Zurn Elkay Water Solutions (ZWS) do?
Zurn Elkay Water Solutions (NYSE: ZWS) designs and manufactures water safety, control, flow, hygienic, and filtered drinking water products used in commercial, institutional, municipal, healthcare, and industrial buildings. The company was formed by the 2022 combination of Zurn Water Solutions and Elkay Manufacturing, and it sells under brands including Zurn, Elkay, Wilkins, Halsey Taylor, World Dryer, and Green Turtle. Its portfolio spans drinking fountains and bottle fillers, backflow preventers, trench and roof drains, faucets, and sensor-based hygiene products, giving it broad exposure to the plumbing content inside nonresidential structures.
AOS vs ZWS: how do they differ?
Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.
- AOS drivers: North American replacement demand; Water treatment and India (Pureit).
- ZWS drivers: Water-focused secular demand; Margin expansion and synergies.
Which fits which kind of investor
A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: China remains the biggest swing risk, with Rest of World sales pressured by a double-digit China decline that can mask North American strength. For ZWS, zWS trades at a premium price-to-earnings multiple, so any slowdown in growth or margin momentum could pressure the stock.
AOS or ZWS: which should you pick?
AOS vs ZWS: the full fundamentals
AOS. AOS trades like a quality industrial, with a P/E broadly in the mid-to-high teens depending on the price and earnings basis used. Q1 2026 revenue of about $946 million fell roughly 2 percent year over year and EPS of $0.85 missed, driven by China weakness and a plant disruption, which led management to lower the full-year outlook. The dividend has been raised for more than 30 straight years at a payout ratio in the mid-30s percent.
ZWS. ZWS delivered roughly $433 million of revenue in Q1 2026, up about 11 percent, with adjusted EBITDA margins near 27 percent and net leverage around 0.5 times. Trailing revenue sits near $1.74 billion and the company generates steady free cash flow. The stock trades at a premium multiple in the high-30s on earnings, reflecting its water-focused growth and margin profile.
Headline figures (approximate, July 2026): AOS shows revenue (ttm) ~$3.8B, net income (2025) ~$525M, diluted eps (2025, record) ~$3.85, 2026 adj. eps guidance ~$3.70-$4.00; ZWS shows revenue (ttm) ~$1.74B, q1 2026 revenue ~$433M (+11% YoY), adjusted ebitda margin ~27%, adjusted eps (q1 2026) ~$0.41.
The bottom line: AOS vs ZWS
AOS and ZWS are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined AOS and ZWS exposure against your real portfolio. It is not an investment adviser.
Wondering how AOS or ZWS fits the portfolio you already own? Walnut is an AI investing app that connects your brokerage read-only and answers questions like that about your actual holdings: overlap, concentration, and how each position tracks the S&P 500. Compare the best AI portfolio analyzers or see the best AI investing apps in 2026.
Investing in A. O. Smith Corporation with AI
Connect the broker you already use and ask Walnut's AI how AOS fits what you actually hold: whether you own it already through a fund, what it would do to your concentration, and how it has tracked the S&P 500. Read-only by default, and you approve anything before it reaches your broker.
FAQ
What is the difference between AOS and ZWS?
+
A. Zurn Elkay Water Solutions (NYSE: ZWS) designs and manufactures water safety, control, flow, hygienic, and filtered drinking water products used in commercial, institutional, municipal, healthcare, and industrial buildings. They show up together because they share investment themes, but they are different businesses, so the better fit depends on which thesis you are expressing.
Is AOS or ZWS the better stock?
+
Neither is universally better; they suit different views and risk levels. Walnut is informational, not investment advice. Compare what each does, the tie-breaker metrics above, and the risks, then decide which fits your thesis and what you already own.
Which is cheaper, AOS or ZWS?
+
On forward P/E (as of September 2026), AOS trades at 14.30x and ZWS at 22.94x, so AOS is the cheaper of the two on next year's expected earnings. A lower multiple is not automatically the better buy: a richer valuation can be justified by faster growth, and a lower one can reflect real risk. Weigh the multiple against how fast each business is compounding.
Should you own both AOS and ZWS?
+
Because they share themes, owning both concentrates you in that theme. That can be intentional (a focused bet) or accidental (less diversification than it looks). Walnut can show your combined exposure across both, and whether adding either over-concentrates you, before you buy.
What are the risks of AOS vs ZWS?
+
AOS: China remains the biggest swing risk, with Rest of World sales pressured by a double-digit China decline that can mask North American strength. AOS is exposed to steel and other input costs, tariffs, and to housing and construction cycles that affect new-build volumes. One-off operational events, such as the 2026 weather damage at the Ashland City plant, can dent shipments in a given quarter. The stock also trades at a premium industrial multiple, so disappointments on volume or guidance (as in early 2026) can pressure the shares. ZWS: ZWS trades at a premium price-to-earnings multiple, so any slowdown in growth or margin momentum could pressure the stock. Its results are tied to nonresidential construction and renovation activity, which is cyclical and exposed to interest rates, municipal budgets, and commercial real estate weakness. Input costs for metals and components, tariffs, and supply chain disruptions can compress margins. The business is concentrated in North America, and integration or acquisition missteps could weigh on returns. Competition from larger and specialized water and plumbing manufacturers is persistent.
Walnut is informational, not investment advice. This page is descriptive and not a recommendation to buy or sell AOS or ZWS; figures are approximate and dated (as of September 2026). Verify current data before investing.