WATSCO INC -CL B (WSO.B) Stock Fundamental Analysis
NYSE:WSO.B - New York Stock Exchange, Inc. - US9426221019 - Common Stock - Currency: USD
Taking everything into account, WSO.B scores 6 out of 10 in our fundamental rating. WSO.B was compared to 48 industry peers in the Trading Companies & Distributors industry. Both the health and profitability get an excellent rating, making WSO.B a very profitable company, without any liquidiy or solvency issues. WSO.B is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year WSO.B was profitable.
WSO.B had a positive operating cash flow in the past year.
In the past 5 years WSO.B has always been profitable.
Each year in the past 5 years WSO.B had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 11.12%, WSO.B belongs to the top of the industry, outperforming 87.76% of the companies in the same industry.
WSO.B has a Return On Equity of 18.75%. This is in the better half of the industry: WSO.B outperforms 73.47% of its industry peers.
WSO.B has a Return On Invested Capital of 17.14%. This is amongst the best in the industry. WSO.B outperforms 91.84% of its industry peers.
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 9.24%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.12% | ||
| ROE | 18.75% | ||
| ROIC | 17.14% |
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
Looking at the Profit Margin, with a value of 6.54%, WSO.B is in the better half of the industry, outperforming 69.39% of the companies in the same industry.
WSO.B's Profit Margin has improved in the last couple of years.
WSO.B has a Operating Margin of 9.86%. This is in the better half of the industry: WSO.B outperforms 63.27% of its industry peers.
WSO.B's Operating Margin has improved in the last couple of years.
WSO.B's Gross Margin of 26.84% is on the low side compared to the rest of the industry. WSO.B is outperformed by 61.22% of its industry peers.
WSO.B's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.86% | ||
| PM (TTM) | 6.54% | ||
| GM | 26.84% |
OM growth 3Y0.55%
OM growth 5Y5.7%
PM growth 3Y2.52%
PM growth 5Y6.74%
GM growth 3Y0.36%
GM growth 5Y2.05%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), WSO.B is creating value.
The number of shares outstanding for WSO.B has been increased compared to 1 year ago.
The number of shares outstanding for WSO.B has been increased compared to 5 years ago.
Compared to 1 year ago, WSO.B has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 10.90 indicates that WSO.B is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 10.90, WSO.B belongs to the top of the industry, outperforming 97.96% 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.
Looking at the Debt to FCF ratio, with a value of 0.02, WSO.B belongs to the top of the industry, outperforming 93.88% of the companies in the same industry.
A Debt/Equity ratio of 0.01 indicates that WSO.B is not too dependend on debt financing.
WSO.B has a better Debt to Equity ratio (0.01) than 89.80% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.02 | ||
| Altman-Z | 10.9 |
ROIC/WACC1.61
WACC10.65%
2.3 Liquidity
A Current Ratio of 3.13 indicates that WSO.B has no problem at all paying its short term obligations.
The Current ratio of WSO.B (3.13) is better than 75.51% of its industry peers.
A Quick Ratio of 1.72 indicates that WSO.B should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.72, WSO.B is doing good in the industry, outperforming 71.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.13 | ||
| Quick Ratio | 1.72 |
3. Growth
3.1 Past
The earnings per share for WSO.B have decreased by -3.00% in the last year.
Measured over the past years, WSO.B shows a quite strong growth in Earnings Per Share. The EPS has been growing by 15.67% on average per year.
WSO.B shows a small growth in Revenue. In the last year, the Revenue has grown by 4.59%.
WSO.B shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.81% yearly.
EPS 1Y (TTM)-3%
EPS 3Y7.25%
EPS 5Y15.67%
EPS Q2Q%15.05%
Revenue 1Y (TTM)4.59%
Revenue growth 3Y6.65%
Revenue growth 5Y9.81%
Sales Q2Q%9.4%
3.2 Future
Based on estimates for the next years, WSO.B will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.55% on average per year.
WSO.B is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.91% yearly.
EPS Next Y12.25%
EPS Next 2Y11.33%
EPS Next 3Y10.71%
EPS Next 5Y9.55%
Revenue Next Year7.28%
Revenue Next 2Y6.51%
Revenue Next 3Y6.19%
Revenue Next 5Y7.91%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 38.27 indicates a quite expensive valuation of WSO.B.
Based on the Price/Earnings ratio, WSO.B is valued a bit more expensive than the industry average as 65.31% of the companies are valued more cheaply.
WSO.B's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 28.79.
With a Price/Forward Earnings ratio of 34.09, WSO.B can be considered very expensive at the moment.
WSO.B's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. WSO.B is more expensive than 69.39% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.38, WSO.B is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.27 | ||
| Fwd PE | 34.09 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WSO.B indicates a rather expensive valuation: WSO.B more expensive than 83.67% of the companies listed in the same industry.
WSO.B's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.4 | ||
| EV/EBITDA | 28.3 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates WSO.B does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of WSO.B may justify a higher PE ratio.
PEG (NY)3.12
PEG (5Y)2.44
EPS Next 2Y11.33%
EPS Next 3Y10.71%
5. Dividend
5.1 Amount
WSO.B has a Yearly Dividend Yield of 2.10%.
WSO.B's Dividend Yield is rather good when compared to the industry average which is at 2.29. WSO.B pays more dividend than 87.76% of the companies in the same industry.
WSO.B's Dividend Yield is comparable with the S&P500 average which is at 2.51.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.1% |
5.2 History
On average, the dividend of WSO.B grows each year by 11.05%, which is quite nice.
WSO.B has been paying a dividend for at least 10 years, so it has a reliable track record.
WSO.B has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)11.05%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
85.00% of the earnings are spent on dividend by WSO.B. This is not a sustainable payout ratio.
The dividend of WSO.B is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP85%
EPS Next 2Y11.33%
EPS Next 3Y10.71%
NYSE:WSO.B (3/17/2025, 8:05:14 PM)
507.1
+3.39 (+0.67%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners105.71%
Inst Owner Change0%
Ins Owners0.39%
Ins Owner ChangeN/A
Market Cap23.33B
Analysts68
Price Target512.33 (1.03%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.1% |
Yearly Dividend9.55
Dividend Growth(5Y)11.05%
DP85%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.94%
Min EPS beat(2)-11.69%
Max EPS beat(2)9.8%
EPS beat(4)1
Avg EPS beat(4)-3.15%
Min EPS beat(4)-11.69%
Max EPS beat(4)9.8%
EPS beat(8)3
Avg EPS beat(8)-2.52%
EPS beat(12)5
Avg EPS beat(12)7.93%
EPS beat(16)9
Avg EPS beat(16)11.75%
Revenue beat(2)1
Avg Revenue beat(2)-0.17%
Min Revenue beat(2)-4.68%
Max Revenue beat(2)4.34%
Revenue beat(4)1
Avg Revenue beat(4)-1.53%
Min Revenue beat(4)-4.68%
Max Revenue beat(4)4.34%
Revenue beat(8)2
Avg Revenue beat(8)-2.2%
Revenue beat(12)3
Avg Revenue beat(12)-1.27%
Revenue beat(16)6
Avg Revenue beat(16)4.62%
PT rev (1m)6.65%
PT rev (3m)6.65%
EPS NQ rev (1m)-0.48%
EPS NQ rev (3m)-1.35%
EPS NY rev (1m)-1.34%
EPS NY rev (3m)-0.83%
Revenue NQ rev (1m)-0.3%
Revenue NQ rev (3m)0.48%
Revenue NY rev (1m)0.86%
Revenue NY rev (3m)0.94%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.27 | ||
| Fwd PE | 34.09 | ||
| P/S | 3.06 | ||
| P/FCF | 31.4 | ||
| P/OCF | 30.18 | ||
| P/B | 8.78 | ||
| P/tB | 11.69 | ||
| EV/EBITDA | 28.3 |
EPS(TTM)13.25
EY2.61%
EPS(NY)14.87
Fwd EY2.93%
FCF(TTM)16.15
FCFY3.18%
OCF(TTM)16.8
OCFY3.31%
SpS165.58
BVpS57.75
TBVpS43.4
PEG (NY)3.12
PEG (5Y)2.44
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.12% | ||
| ROE | 18.75% | ||
| ROCE | 21.49% | ||
| ROIC | 17.14% | ||
| ROICexc | 22.08% | ||
| ROICexgc | 29.18% | ||
| OM | 9.86% | ||
| PM (TTM) | 6.54% | ||
| GM | 26.84% | ||
| FCFM | 9.75% |
ROA(3y)13.43%
ROA(5y)12.52%
ROE(3y)23.42%
ROE(5y)21.95%
ROIC(3y)20.81%
ROIC(5y)19.72%
ROICexc(3y)23.47%
ROICexc(5y)21.78%
ROICexgc(3y)31.07%
ROICexgc(5y)29.54%
ROCE(3y)26.1%
ROCE(5y)24.73%
ROICexcg growth 3Y-0.91%
ROICexcg growth 5Y8.07%
ROICexc growth 3Y0.61%
ROICexc growth 5Y9.42%
OM growth 3Y0.55%
OM growth 5Y5.7%
PM growth 3Y2.52%
PM growth 5Y6.74%
GM growth 3Y0.36%
GM growth 5Y2.05%
F-Score4
Asset Turnover1.7
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.02 | ||
| Debt/EBITDA | 0.02 | ||
| Cap/Depr | 73.71% | ||
| Cap/Sales | 0.39% | ||
| Interest Coverage | 775.31 | ||
| Cash Conversion | 97.6% | ||
| Profit Quality | 149.13% | ||
| Current Ratio | 3.13 | ||
| Quick Ratio | 1.72 | ||
| Altman-Z | 10.9 |
F-Score4
WACC10.65%
ROIC/WACC1.61
Cap/Depr(3y)95.78%
Cap/Depr(5y)88.24%
Cap/Sales(3y)0.46%
Cap/Sales(5y)0.42%
Profit Quality(3y)117.3%
Profit Quality(5y)129.41%
High Growth Momentum
Growth
EPS 1Y (TTM)-3%
EPS 3Y7.25%
EPS 5Y15.67%
EPS Q2Q%15.05%
EPS Next Y12.25%
EPS Next 2Y11.33%
EPS Next 3Y10.71%
EPS Next 5Y9.55%
Revenue 1Y (TTM)4.59%
Revenue growth 3Y6.65%
Revenue growth 5Y9.81%
Sales Q2Q%9.4%
Revenue Next Year7.28%
Revenue Next 2Y6.51%
Revenue Next 3Y6.19%
Revenue Next 5Y7.91%
EBIT growth 1Y-2.26%
EBIT growth 3Y7.24%
EBIT growth 5Y16.07%
EBIT Next Year16.27%
EBIT Next 3Y11.05%
EBIT Next 5Y9.61%
FCF growth 1Y41.13%
FCF growth 3Y31.86%
FCF growth 5Y18.5%
OCF growth 1Y37.57%
OCF growth 3Y30.29%
OCF growth 5Y18.15%