Sifting through countless of stocks in the Building Products industry can be tedious, and sometimes two stocks are just too similar to judge which is the better investment. If you’re on the fence about investing in Trex Company, Inc. or A. O. Smith Corporation because you’re not sure how they measure up, it’s important to compare them on a few factors before making your decision.

Read on to learn how Trex Company, Inc. and A. O. Smith Corporation compare based on key financial metrics to determine which better meets your investment needs.

About Trex Company, Inc. and A. O. Smith Corporation

Trex Company, Inc. manufactures and sells composite decking and railing products in the United States. It offers decking products and accessories that can be used for protection against fading, staining, mold, and scratching, including Trex Transcend, which are decking products that can also be used as cladding; Trex Signature; Trex Transcend Lineage; Trex Select; Trex Enhance; Trex Hideaway fastener collection; and Trex DeckLighting, an outdoor lighting system that includes a post cap, deck rail, riser, a soffit, and a recessed deck lights. The company also offers railing products, such as Trex Signature X-Series Railing, Trex Signature aluminum railing, Trex Transcend Railing, Trex Select Railing, Trex Select T-Rail, Trex Enhance Railing; and fencing products, which includes Trex Seclusions that consists of structural posts, bottom rails, pickets, top rails, and decorative post caps. In addition, it acts as a licensor in various licensing agreements with third parties to manufacture and sell products under the Trex name, including Trex Outdoor Furniture; Trex RainEscape, an above joist deck drainage system; Trex Protect joist, beam and rim tape, a self-adhesive butyl tape that protects wooden deck framing/substructure elements; Trex RainEscape Soffit Light, a plug-and-play LED Soffit light that is installed in the under-deck ceiling of a two-story deck; Trex Seal Ledger Flashing Tape, butyl flashing tape with an aluminum liner; Trex Pergola, Pergolas made from low maintenance aluminum reinforced cellular PVC; Trex Lattice outdoor boards; Trex Cornhole boards; Trex Blade, a specialty saw blade for wood-alternative composite decking; Trex SpiralStairs; and Trex Outdoor Kitchen cabinetry. The company sells its products through wholesale distributors, retail lumber dealers, and Home Depot and Lowe’s stores. Trex Company, Inc. was founded in 1996 and is headquartered in Winchester, Virginia.

A. O. Smith Corporation manufactures and markets residential and commercial gas and electric water heaters, boilers, heat pumps, tanks, and water treatment products in North America, China, Europe, and India. The company offers water heaters for residences, restaurants, hotels, office buildings, laundries, car washes, and small businesses; boilers for hospitals, schools, hotels, homes, apartments, and condominiums, and other large commercial buildings; and water treatment products comprising point-of-entry water softeners, well water solutions, and whole-home water filtration products, and point-of-use carbon and reverse osmosis products for residences, restaurants, hotels, and offices. It also provides commercial water treatment and filtration products; expansion tanks, commercial solar water heating systems, swimming pool and spa heaters, and related products and parts; and electric wall-hung, gas tankless, combi-boiler, and heat pump and solar water heaters. The company offers its products under the A. O. Smith, State, Lochinvar, Hague, Water-Right, Master Water, Atlantic Filter, Impact, and Water Tec brands. It distributes its products through independent wholesale plumbing distributors, as well as to retail channels consisting of hardware and home center chains, and manufacturer representative firms, as well as offers Aquasana branded products directly to consumers through e-commerce channels; and A. O. Smith branded water treatment products through dealer network and Amazon. A. O. Smith Corporation was founded in 1874 and is headquartered in Milwaukee, Wisconsin.

Latest Building Products and Trex Company, Inc., A. O. Smith Corporation Stock News

As of March 31, 2026, Trex Company, Inc. had a $3.8 billion market capitalization, compared to the Building Products median of $4.9 million. Trex Company, Inc.’s stock is up 3.8% in 2026, down 0.8% in the previous five trading days and down 36.45% in the past year.

Currently, Trex Company, Inc.’s price-earnings ratio is 20.5. Trex Company, Inc.’s trailing 12-month revenue is $1.2 billion with a 16.2% net profit margin. Year-over-year quarterly sales growth most recently was -3.9%. Analysts expect adjusted earnings to reach $1.647 per share for the current fiscal year. Trex Company, Inc. does not currently pay a dividend.

As of March 31, 2026, A. O. Smith Corporation had a $9.1 billion market cap, putting it in the 78th percentile of all stocks. A. O. Smith Corporation’s stock is down 1.4% in 2026, up 0.7% in the previous five trading days and up 0.5% in the past year.

Currently, A. O. Smith Corporation’s price-earnings ratio is 17.1. A. O. Smith Corporation’s trailing 12-month revenue is $3.8 billion with a 14.3% net profit margin. Year-over-year quarterly sales growth most recently was 0.0%. Analysts expect adjusted earnings to reach $4.011 per share for the current fiscal year. A. O. Smith Corporation currently has a 2.2% dividend yield.

How We Compare Trex Company, Inc. and A. O. Smith Corporation Stock Grades

Stock evaluation requires access to huge amounts of data and the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movements. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors streamline and work through such data.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A‐F grades for each of five key investing factors: value, growth, momentum, earnings estimate revisions and quality. Here, we’ll take a closer look at Trex Company, Inc. and A. O. Smith Corporation’s stock grades to see how they measure up against one another.

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Trex Company, Inc. and A. O. Smith Corporation Growth Grades

Company	Ticker	Growth
Trex Company, Inc.	TREX	B
A. O. Smith Corporation	AOS	A

The foundation of growth investing is seeking out stocks of companies exhibiting strong, consistent and prolonged growth that is expected to continue into the future.

In order to compute the growth score and assign it a letter grade, the percentile ranks for each of three components‐consistency of annual sales growth, five-year sales growth rankings adjusted for extreme levels, and consistency of positive annual cash from operations‐must be determined. These three rank figures are added together, and the sum is ranked against the entire stock universe to arrive at a company’s Growth Score to create an equal distribution of grades.

The companies in the bottom 20% of the stock universe receive Growth Grades of F, considered to be very weak, while those in the top 20% receive A grades, which are considered very strong.

Trex Company, Inc. has a Growth Score of 78, which is Strong. A. O. Smith Corporation has a Growth Score of 95, which is Very Strong.

The Growth Grade Winner: A. O. Smith Corporation

As you can clearly see from the Growth Grade breakdown above, A. O. Smith Corporation has a more attractive growth grade than Trex Company, Inc.. For investors who focus solely on how a company is growing relative to other companies in the same industry, A. O. Smith Corporation could be a good stock to add to their portfolio. However, it’s important for investors to analyze multiple factors based on a wide range of metrics before deciding whether to buy.

Trex Company, Inc. and A. O. Smith Corporation’s Quality Grades

Company	Ticker	Quality
Trex Company, Inc.	TREX	A
A. O. Smith Corporation	AOS	A

Like the Value Grade, AAII’s A+ Investor Quality Grade comes from the percentile rank of key metrics. Specifically, the Quality Score is the percentile rank of the average of the percentile ranks of return on assets (ROA), return on invested capital (ROIC), gross profit relative to assets, buyback yield, change in total liabilities to assets, accruals, Z double prime bankruptcy risk (Z) score and the F-Score.

The score is variable, meaning it can consider all eight measures or, should any of the eight measures not be valid, the remaining measures that are valid. To be assigned a Quality Score, stocks must have a valid (non-null) measure and corresponding ranking for at least four of the eight quality measures.

The Quality Score is used to assess the underlying “quality” of a particular stock. A higher-quality stock possesses traits associated with upside potential and reduced downside risk. Backtesting of the Quality Grade shows that stocks with higher grades, on average, outperformed stocks with lower grades over the period of 1998 through 2019.

Stocks receive better grades (higher scores) for having higher scores for the quality subcomponents and worse grades (lower scores) for lower scores for the subcomponents.

Trex Company, Inc. has a Quality Score of 98, which is Very Strong. A. O. Smith Corporation has a Quality Score of 99, which is Very Strong.

The Quality Grade Winner: It’s a Tie!

Looking at the Quality Grade breakdown above, both Trex Company, Inc. and A. O. Smith Corporation have a grade of A. For investors who focus solely on a company’s overall quality, you will need to conduct further research into both companies to see if they are a good fit for your portfolio. As a good rule of thumb, you should always analyze multiple factors based on a wide range of metrics before choosing a company to invest in.

Trex Company, Inc. and A. O. Smith Corporation’s Momentum Grades

Company	Ticker	Momentum
Trex Company, Inc.	TREX	D
A. O. Smith Corporation	AOS	C

Momentum grades help to uncover stocks experiencing anomalously high rates of return; research finds that stocks with high relative levels of momentum tend to outperform, whereas those with low levels of momentum tend to continue underperforming. Momentum is based on the price change of a stock over a specified period relative to all other stocks.

Typically, AAII looks at the weighted relative strength over the trailing four quarters. The weighted four-quarter relative strength rank is the relative price change for each of the past four quarters. The most recent quarterly price change is given a weight of 40% and each of the three previous quarters are given a weighting of 20%.

Trex Company, Inc. has a Momentum Score of 24, which is Weak. A. O. Smith Corporation has a Momentum Score of 41, which is Average.

The Momentum Stock Winner: No Clear Winner

Neither Trex Company, Inc. or A. O. Smith Corporation has a strong enough Momentum Grade to be considered a “winner.” Investors considering these companies should do additional due diligence and research to see if either could be a good addition to their portfolios. It’s important to look at a wide range of financial metrics in order to determine if Trex Company, Inc. or A. O. Smith Corporation is the better investment when it comes to momentum.

Other Trex Company, Inc. and A. O. Smith Corporation Grades

In addition to Growth, Momentum and Quality, A+ Investor also provides grades for Value and Estimate Revisions.

Earnings estimate revisions scores take into account the magnitude of a company’s earnings surprise in its last two reported fiscal quarters. Often, surprises beget further surprises‐or at least continued sales growth (the exact opposite is generally true, too).

Successful stock investing involves buying low and selling high, so stock valuation is an important consideration for stock selection. Buying stocks that are going to go up typically means buying stocks that are undervalued in the first place, although momentum investors may argue that point.

These 2 key factors, when combined with the above, provide a holistic view into a particular stock. Further, by joining A+ Investor you can see whether Trex Company, Inc. and A. O. Smith Corporation pass any of our 60+ stock screens that have outperformed the market since their creation.

So, Which Is the Better Investment, Trex Company, Inc. or A. O. Smith Corporation Stock?

Overall, Trex Company, Inc. stock has a Growth Score of 78, Momentum Score of 24 and Quality Score of 98.

A. O. Smith Corporation stock has a Growth Score of 95, Momentum Score of 41 and Quality Score of 99.

Comparing Trex Company, Inc. and A. O. Smith Corporation’s grades, scores and metrics can act as a solid basis to determine whether they may be a good investment or not. You’ll also want to look at your portfolio’s asset allocation as well as your risk tolerance and financial goals to see if either of these stocks would make a good fit for you. AAII can help you figure out which investments align with your individual needs and preferences.

Investors are encouraged to do their own due diligence and research. In this way, individuals can effectively become managers of their own assets‐without having to rely on others for financial independence. You can count on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis.

A+ Investor adds to our qualitative teaching with a powerful data suite to help you whittle down investment choices to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith, and we accept no liability for any errors or omissions. The full disclaimer can be read here.