WATSCO INC -CL B (WSO.B) Stock Fundamental Analysis
NYSE:WSO.B - New York Stock Exchange, Inc. - US9426221019 - Common Stock - Currency: USD
WSO.B gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 49 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 quite expensive at the moment. It does show a decent growth rate. This makes WSO.B very considerable for quality investing!
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.
Each year in the past 5 years WSO.B has been profitable.
WSO.B had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
WSO.B has a Return On Assets of 11.10%. This is amongst the best in the industry. WSO.B outperforms 87.50% of its industry peers.
WSO.B's Return On Equity of 18.72% is fine compared to the rest of the industry. WSO.B outperforms 68.75% of its industry peers.
Looking at the Return On Invested Capital, with a value of 17.14%, WSO.B belongs to the top of the industry, outperforming 93.75% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for WSO.B is significantly above the industry average of 9.86%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.1% | ||
| ROE | 18.72% | ||
| 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 6.53%, WSO.B is in the better half of the industry, outperforming 72.92% of the companies in the same industry.
In the last couple of years the Profit Margin of WSO.B has grown nicely.
With a decent Operating Margin value of 9.86%, WSO.B is doing good in the industry, outperforming 62.50% of the companies in the same industry.
In the last couple of years the Operating Margin of WSO.B has grown nicely.
WSO.B has a Gross Margin of 26.84%. This is in the lower half of the industry: WSO.B underperforms 62.50% 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) | 6.53% | ||
| 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
WSO.B has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, WSO.B has less shares outstanding
Compared to 5 years ago, WSO.B has less shares outstanding
WSO.B has a worse debt/assets ratio than last year.
2.2 Solvency
WSO.B has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.15 | ||
| Altman-Z | N/A |
ROIC/WACC1.56
WACC10.97%
2.3 Liquidity
A Current Ratio of 3.13 indicates that WSO.B has no problem at all paying its short term obligations.
With a decent Current ratio value of 3.13, WSO.B is doing good in the industry, outperforming 79.17% of the companies in the same industry.
WSO.B has a Quick Ratio of 1.72. This is a normal value and indicates that WSO.B is financially healthy and should not expect problems in meeting its short term obligations.
WSO.B has a Quick ratio of 1.72. This is in the better half of the industry: WSO.B outperforms 79.17% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.13 | ||
| Quick Ratio | 1.72 |
3. Growth
3.1 Past
WSO.B shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -3.00%.
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.
WSO.B shows a small growth in Revenue. In the last year, the Revenue has grown by 4.59%.
Measured over the past years, WSO.B shows a quite strong growth in Revenue. The Revenue has been growing by 9.81% on average per year.
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 10.12% on average per year.
WSO.B is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.81% yearly.
EPS Next Y13.78%
EPS Next 2Y12.12%
EPS Next 3Y12.37%
EPS Next 5Y10.12%
Revenue Next Year6.36%
Revenue Next 2Y6.43%
Revenue Next 3Y6.99%
Revenue Next 5Y8.81%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past 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
Based on the Price/Earnings ratio of 38.63, the valuation of WSO.B can be described as expensive.
Based on the Price/Earnings ratio, WSO.B is valued a bit more expensive than the industry average as 70.83% of the companies are valued more cheaply.
WSO.B is valuated rather expensively when we compare the Price/Earnings ratio to 30.30, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 33.96 indicates a quite expensive valuation of WSO.B.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WSO.B indicates a slightly more expensive valuation: WSO.B is more expensive than 70.83% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.06, WSO.B is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.63 | ||
| Fwd PE | 33.96 |
4.2 Price Multiples
81.25% of the companies in the same industry are cheaper than WSO.B, based on the Enterprise Value to EBITDA ratio.
62.50% of the companies in the same industry are more expensive than WSO.B, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.63 | ||
| EV/EBITDA | 28.51 |
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.
WSO.B has an outstanding profitability rating, which may justify a higher PE ratio.
WSO.B's earnings are expected to grow with 12.37% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.8
PEG (5Y)2.47
EPS Next 2Y12.12%
EPS Next 3Y12.37%
5. Dividend
5.1 Amount
WSO.B has a Yearly Dividend Yield of 2.10%. Purely for dividend investing, there may be better candidates out there.
WSO.B's Dividend Yield is rather good when compared to the industry average which is at 1.87. WSO.B pays more dividend than 89.58% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.29, WSO.B has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.1% |
5.2 History
On average, the dividend of WSO.B grows each year by 11.93%, which is quite nice.
WSO.B has paid a dividend for at least 10 years, which is 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)11.93%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
WSO.B pays out 85.15% of its income as dividend. 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.
DP85.15%
EPS Next 2Y12.12%
EPS Next 3Y12.37%
511.89
-17.57 (-3.32%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners107.27%
Inst Owner Change5.34%
Ins Owners0.63%
Ins Owner ChangeN/A
Market Cap23.51B
Analysts68
Price Target480.39 (-6.15%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.1% |
Yearly Dividend8.71
Dividend Growth(5Y)11.93%
DP85.15%
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)0%
PT rev (3m)0%
EPS NQ rev (1m)-1.83%
EPS NQ rev (3m)-2.13%
EPS NY rev (1m)-0.42%
EPS NY rev (3m)-0.48%
Revenue NQ rev (1m)0.3%
Revenue NQ rev (3m)0.36%
Revenue NY rev (1m)0.08%
Revenue NY rev (3m)0.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.63 | ||
| Fwd PE | 33.96 | ||
| P/S | 3.09 | ||
| P/FCF | 31.63 | ||
| P/OCF | 30.41 | ||
| P/B | 8.85 | ||
| P/tB | 12.94 | ||
| EV/EBITDA | 28.51 |
EPS(TTM)13.25
EY2.59%
EPS(NY)15.08
Fwd EY2.95%
FCF(TTM)16.18
FCFY3.16%
OCF(TTM)16.83
OCFY3.29%
SpS165.87
BVpS57.85
TBVpS39.56
PEG (NY)2.8
PEG (5Y)2.47
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.1% | ||
| ROE | 18.72% | ||
| ROCE | 21.49% | ||
| ROIC | 17.14% | ||
| ROICexc | 22.08% | ||
| ROICexgc | 31.97% | ||
| OM | 9.86% | ||
| PM (TTM) | 6.53% | ||
| GM | 26.84% | ||
| FCFM | 9.76% |
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)32%
ROICexgc(5y)30.1%
ROCE(3y)26.1%
ROCE(5y)24.73%
ROICexcg growth 3Y2.16%
ROICexcg growth 5Y10.07%
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 | ||
| Debt/FCF | 0.15 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 73.07% | ||
| Cap/Sales | 0.39% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 97.6% | ||
| Profit Quality | 149.44% | ||
| Current Ratio | 3.13 | ||
| Quick Ratio | 1.72 | ||
| Altman-Z | N/A |
F-Score4
WACC10.97%
ROIC/WACC1.56
Cap/Depr(3y)95.57%
Cap/Depr(5y)88.11%
Cap/Sales(3y)0.46%
Cap/Sales(5y)0.42%
Profit Quality(3y)117.32%
Profit Quality(5y)129.42%
High Growth Momentum
Growth
EPS 1Y (TTM)-3%
EPS 3Y7.25%
EPS 5Y15.67%
EPS Q2Q%15.05%
EPS Next Y13.78%
EPS Next 2Y12.12%
EPS Next 3Y12.37%
EPS Next 5Y10.12%
Revenue 1Y (TTM)4.59%
Revenue growth 3Y6.65%
Revenue growth 5Y9.81%
Sales Q2Q%9.4%
Revenue Next Year6.36%
Revenue Next 2Y6.43%
Revenue Next 3Y6.99%
Revenue Next 5Y8.81%
EBIT growth 1Y-2.26%
EBIT growth 3Y7.24%
EBIT growth 5Y16.07%
EBIT Next Year17.18%
EBIT Next 3Y15.15%
EBIT Next 5Y10.86%
FCF growth 1Y41.18%
FCF growth 3Y31.87%
FCF growth 5Y18.51%
OCF growth 1Y37.57%
OCF growth 3Y30.29%
OCF growth 5Y18.15%