WATSCO INC -CL B (WSO.B) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:WSO.B - US9426221019 - Common Stock
375.68 USD
-0.51 (-0.14%)
We assign a fundamental rating of 6 out of 10 to WSO.B. WSO.B was compared to 50 industry peers in the Trading Companies & Distributors industry. WSO.B scores excellent points on both the profitability and health parts. This is a solid base for a good stock. WSO.B is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- WSO.B had positive earnings in the past year.
- WSO.B had a positive operating cash flow in the past year.
- WSO.B had positive earnings in each of the past 5 years.
- Each year in the past 5 years WSO.B had a positive operating cash flow.
1.2 Ratios
- WSO.B's Return On Assets of 10.66% is amongst the best of the industry. WSO.B outperforms 84.00% of its industry peers.
- WSO.B's Return On Equity of 17.24% is fine compared to the rest of the industry. WSO.B outperforms 72.00% of its industry peers.
- With an excellent Return On Invested Capital value of 15.48%, WSO.B belongs to the best of the industry, outperforming 92.00% of the companies in the same industry.
- WSO.B had an Average Return On Invested Capital over the past 3 years of 20.81%. This is significantly above the industry average of 9.64%.
- The 3 year average ROIC (20.81%) for WSO.B is well above the current ROIC(15.48%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.66% | ||
| ROE | 17.24% | ||
| ROIC | 15.48% |
ROA(3y)13.43%
ROA(5y)12.52%
ROE(3y)23.42%
ROE(5y)21.95%
ROIC(3y)20.81%
ROIC(5y)19.72%
1.3 Margins
- With a decent Profit Margin value of 6.55%, WSO.B is doing good in the industry, outperforming 70.00% of the companies in the same industry.
- In the last couple of years the Profit Margin of WSO.B has grown nicely.
- WSO.B's Operating Margin of 9.80% is fine compared to the rest of the industry. WSO.B outperforms 70.00% of its industry peers.
- In the last couple of years the Operating Margin of WSO.B has grown nicely.
- WSO.B has a Gross Margin of 27.92%. This is comparable to the rest of the industry: WSO.B outperforms 48.00% of its industry peers.
- WSO.B's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.8% | ||
| PM (TTM) | 6.55% | ||
| GM | 27.92% |
OM growth 3Y0.55%
OM growth 5Y5.7%
PM growth 3Y2.52%
PM growth 5Y6.73%
GM growth 3Y0.36%
GM growth 5Y2.05%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so WSO.B is creating value.
- Compared to 1 year ago, WSO.B has more shares outstanding
- The number of shares outstanding for WSO.B has been increased compared to 5 years ago.
- WSO.B has a better debt/assets ratio than last year.
2.2 Solvency
- WSO.B has an Altman-Z score of 8.44. This indicates that WSO.B is financially healthy and has little risk of bankruptcy at the moment.
- With an excellent Altman-Z score value of 8.44, WSO.B belongs to the best of the industry, outperforming 88.00% of the companies in the same industry.
- WSO.B has a debt to FCF ratio of 0.02. This is a very positive value and a sign of high solvency as it would only need 0.02 years to pay back of all of its debts.
- WSO.B's Debt to FCF ratio of 0.02 is amongst the best of the industry. WSO.B outperforms 92.00% of its industry peers.
- WSO.B has a Debt/Equity ratio of 0.00. This is a healthy value indicating a solid balance between debt and equity.
- WSO.B has a better Debt to Equity ratio (0.00) than 86.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.02 | ||
| Altman-Z | 8.44 |
ROIC/WACC1.58
WACC9.79%
2.3 Liquidity
- WSO.B has a Current Ratio of 3.84. This indicates that WSO.B is financially healthy and has no problem in meeting its short term obligations.
- WSO.B's Current ratio of 3.84 is amongst the best of the industry. WSO.B outperforms 88.00% of its industry peers.
- A Quick Ratio of 1.86 indicates that WSO.B should not have too much problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 1.86, WSO.B is in the better half of the industry, outperforming 72.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.84 | ||
| Quick Ratio | 1.86 |
3. Growth
3.1 Past
- The earnings per share for WSO.B have decreased by -1.05% in the last year.
- WSO.B shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.67% yearly.
- Looking at the last year, WSO.B shows a decrease in Revenue. The Revenue has decreased by -0.71% in the last year.
- The Revenue has been growing by 9.81% on average over the past years. This is quite good.
EPS 1Y (TTM)-1.05%
EPS 3Y7.25%
EPS 5Y15.67%
EPS Q2Q%-5.69%
Revenue 1Y (TTM)-0.71%
Revenue growth 3Y6.65%
Revenue growth 5Y9.81%
Sales Q2Q%-4.31%
3.2 Future
- WSO.B is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.95% yearly.
- Based on estimates for the next years, WSO.B will show a small growth in Revenue. The Revenue will grow by 3.59% on average per year.
EPS Next Y-6.01%
EPS Next 2Y-0.41%
EPS Next 3Y2.4%
EPS Next 5Y9.95%
Revenue Next Year-3.44%
Revenue Next 2Y-0.04%
Revenue Next 3Y1.62%
Revenue Next 5Y3.59%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 29.35, WSO.B can be considered very expensive at the moment.
- WSO.B's Price/Earnings is on the same level as the industry average.
- Compared to an average S&P500 Price/Earnings ratio of 27.21, WSO.B is valued at the same level.
- Based on the Price/Forward Earnings ratio of 28.59, the valuation of WSO.B can be described as expensive.
- WSO.B's Price/Forward Earnings is on the same level as the industry average.
- WSO.B's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 25.98.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.35 | ||
| Fwd PE | 28.59 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, WSO.B is valued a bit more expensive than 60.00% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, WSO.B is valued a bit cheaper than the industry average as 70.00% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.45 | ||
| EV/EBITDA | 19.03 |
4.3 Compensation for Growth
- The excellent profitability rating of WSO.B may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.87
EPS Next 2Y-0.41%
EPS Next 3Y2.4%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 3.19%, WSO.B has a reasonable but not impressive dividend return.
- The stock price of WSO.B dropped by -22.35% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
- Compared to an average industry Dividend Yield of 1.31, WSO.B pays a better dividend. On top of this WSO.B pays more dividend than 86.00% of the companies listed in the same industry.
- WSO.B's Dividend Yield is rather good when compared to the S&P500 average which is at 1.81.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.19% |
5.2 History
- The dividend of WSO.B is nicely growing with an annual growth rate of 11.05%!
- WSO.B has been paying a dividend for at least 10 years, so it has a reliable track record.
- WSO.B has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)11.05%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
- 95.01% of the earnings are spent on dividend by WSO.B. This is not a sustainable payout ratio.
- WSO.B's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP95.01%
EPS Next 2Y-0.41%
EPS Next 3Y2.4%
WATSCO INC -CL B / WSO.B FAQ
What is the ChartMill fundamental rating of WATSCO INC -CL B (WSO.B) stock?
ChartMill assigns a fundamental rating of 6 / 10 to WSO.B.
What is the valuation status for WSO.B stock?
ChartMill assigns a valuation rating of 3 / 10 to WATSCO INC -CL B (WSO.B). This can be considered as Overvalued.
Can you provide the profitability details for WATSCO INC -CL B?
WATSCO INC -CL B (WSO.B) has a profitability rating of 8 / 10.
Can you provide the financial health for WSO.B stock?
The financial health rating of WATSCO INC -CL B (WSO.B) is 8 / 10.
Is the dividend of WATSCO INC -CL B sustainable?
The dividend rating of WATSCO INC -CL B (WSO.B) is 6 / 10 and the dividend payout ratio is 95.01%.