WATSCO INC (WSO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:WSO - US9426222009 - Common Stock
344.59 USD
-10.02 (-2.83%)
344.59 USD
0 (0%)
We assign a fundamental rating of 7 out of 10 to WSO. WSO was compared to 50 industry peers in the Trading Companies & Distributors industry. WSO scores excellent points on both the profitability and health parts. This is a solid base for a good stock. While showing a medium growth rate, WSO is valued expensive at the moment. Finally WSO also has an excellent dividend rating. This makes WSO very considerable for dividend and quality investing!
1. Profitability
1.1 Basic Checks
In the past year WSO was profitable.
WSO had a positive operating cash flow in the past year.
Each year in the past 5 years WSO has been profitable.
In the past 5 years WSO always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of WSO (10.66%) is better than 84.00% of its industry peers.
The Return On Equity of WSO (17.24%) is better than 72.00% of its industry peers.
WSO's Return On Invested Capital of 15.48% is amongst the best of the industry. WSO outperforms 92.00% of its industry peers.
WSO had an Average Return On Invested Capital over the past 3 years of 20.81%. This is significantly above the industry average of 9.63%.
The 3 year average ROIC (20.81%) for WSO 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
The Profit Margin of WSO (6.55%) is better than 70.00% of its industry peers.
In the last couple of years the Profit Margin of WSO has grown nicely.
With a decent Operating Margin value of 9.80%, WSO is doing good in the industry, outperforming 70.00% of the companies in the same industry.
In the last couple of years the Operating Margin of WSO has grown nicely.
With a Gross Margin value of 27.92%, WSO perfoms like the industry average, outperforming 46.00% of the companies in the same industry.
WSO'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 5Y6.74%
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 is creating value.
WSO has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, WSO has more shares outstanding
Compared to 1 year ago, WSO has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 8.00 indicates that WSO is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 8.00, WSO belongs to the best of the industry, outperforming 88.00% of the companies in the same industry.
The Debt to FCF ratio of WSO is 0.02, which is an excellent value as it means it would take WSO, only 0.02 years of fcf income to pay off all of its debts.
WSO has a Debt to FCF ratio of 0.02. This is amongst the best in the industry. WSO outperforms 92.00% of its industry peers.
A Debt/Equity ratio of 0.00 indicates that WSO is not too dependend on debt financing.
With an excellent Debt to Equity ratio value of 0.00, WSO belongs to the best of the industry, outperforming 86.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.02 | ||
| Altman-Z | 8 |
ROIC/WACC1.57
WACC9.88%
2.3 Liquidity
A Current Ratio of 3.84 indicates that WSO has no problem at all paying its short term obligations.
The Current ratio of WSO (3.84) is better than 88.00% of its industry peers.
WSO has a Quick Ratio of 1.86. This is a normal value and indicates that WSO is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Quick ratio value of 1.86, WSO is doing good in 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 have decreased by -1.05% in the last year.
The Earnings Per Share has been growing by 15.67% on average over the past years. This is quite good.
The Revenue has decreased by -0.71% in the past year.
Measured over the past years, WSO shows a quite strong growth in Revenue. The Revenue has been growing by 9.81% on average per year.
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 is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.57% yearly.
Based on estimates for the next years, WSO will show a quite strong growth in Revenue. The Revenue will grow by 8.19% on average per year.
EPS Next Y-6.04%
EPS Next 2Y0.29%
EPS Next 3Y3.15%
EPS Next 5Y11.57%
Revenue Next Year-3.47%
Revenue Next 2Y0.3%
Revenue Next 3Y1.8%
Revenue Next 5Y8.19%
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.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 26.92, which means the current valuation is very expensive for WSO.
The rest of the industry has a similar Price/Earnings ratio as WSO.
WSO is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.55, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 25.86, the valuation of WSO can be described as expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as WSO.
When comparing the Price/Forward Earnings ratio of WSO to the average of the S&P500 Index (23.78), we can say WSO is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.92 | ||
| Fwd PE | 25.86 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WSO is valued a bit more expensive than the industry average as 60.00% of the companies are valued more cheaply.
WSO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. WSO is cheaper than 66.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.01 | ||
| EV/EBITDA | 17.39 |
4.3 Compensation for Growth
The excellent profitability rating of WSO may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.72
EPS Next 2Y0.29%
EPS Next 3Y3.15%
5. Dividend
5.1 Amount
WSO has a Yearly Dividend Yield of 3.26%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 0.97, WSO pays a better dividend. On top of this WSO pays more dividend than 90.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 1.87, WSO pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.26% |
5.2 History
The dividend of WSO is nicely growing with an annual growth rate of 11.05%!
WSO has paid a dividend for at least 10 years, which is a reliable track record.
WSO 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
WSO pays out 95.01% of its income as dividend. This is not a sustainable payout ratio.
The dividend of WSO is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP95.01%
EPS Next 2Y0.29%
EPS Next 3Y3.15%
344.59
-10.02 (-2.83%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners112.32%
Inst Owner Change3.13%
Ins Owners0.38%
Ins Owner Change0%
Market Cap13.98B
Revenue(TTM)7.41B
Net Income(TTM)485.36M
Analysts66
Price Target417.56 (21.18%)
Short Float %9.16%
Short Ratio6.55
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.26% |
Yearly Dividend9.55
Dividend Growth(5Y)11.05%
DP95.01%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-6.38%
Min EPS beat(2)-6.66%
Max EPS beat(2)-6.09%
EPS beat(4)1
Avg EPS beat(4)-4.57%
Min EPS beat(4)-15.33%
Max EPS beat(4)9.8%
EPS beat(8)1
Avg EPS beat(8)-7.02%
EPS beat(12)4
Avg EPS beat(12)1.45%
EPS beat(16)6
Avg EPS beat(16)5.32%
Revenue beat(2)0
Avg Revenue beat(2)-6.6%
Min Revenue beat(2)-8.58%
Max Revenue beat(2)-4.61%
Revenue beat(4)1
Avg Revenue beat(4)-4.31%
Min Revenue beat(4)-8.58%
Max Revenue beat(4)4.34%
Revenue beat(8)1
Avg Revenue beat(8)-3.93%
Revenue beat(12)2
Avg Revenue beat(12)-3.5%
Revenue beat(16)4
Avg Revenue beat(16)-1.61%
PT rev (1m)-5.48%
PT rev (3m)-12.78%
EPS NQ rev (1m)-0.48%
EPS NQ rev (3m)-24.36%
EPS NY rev (1m)-2.25%
EPS NY rev (3m)-10.14%
Revenue NQ rev (1m)-0.67%
Revenue NQ rev (3m)-8.23%
Revenue NY rev (1m)-1.06%
Revenue NY rev (3m)-4.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.92 | ||
| Fwd PE | 25.86 | ||
| P/S | 1.89 | ||
| P/FCF | 27.01 | ||
| P/OCF | 25.47 | ||
| P/B | 4.97 | ||
| P/tB | 6.52 | ||
| EV/EBITDA | 17.39 |
EPS(TTM)12.8
EY3.71%
EPS(NY)13.33
Fwd EY3.87%
FCF(TTM)12.76
FCFY3.7%
OCF(TTM)13.53
OCFY3.93%
SpS182.8
BVpS69.4
TBVpS52.83
PEG (NY)N/A
PEG (5Y)1.72
Graham Number141.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.66% | ||
| ROE | 17.24% | ||
| ROCE | 19.41% | ||
| ROIC | 15.48% | ||
| ROICexc | 18% | ||
| ROICexgc | 22.75% | ||
| OM | 9.8% | ||
| PM (TTM) | 6.55% | ||
| GM | 27.92% | ||
| FCFM | 6.98% |
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%
ROICexgc growth 3Y-0.91%
ROICexgc 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-Score6
Asset Turnover1.63
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.02 | ||
| Debt/EBITDA | 0.02 | ||
| Cap/Depr | 72.48% | ||
| Cap/Sales | 0.42% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 71.31% | ||
| Profit Quality | 106.61% | ||
| Current Ratio | 3.84 | ||
| Quick Ratio | 1.86 | ||
| Altman-Z | 8 |
F-Score6
WACC9.88%
ROIC/WACC1.57
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)-1.05%
EPS 3Y7.25%
EPS 5Y15.67%
EPS Q2Q%-5.69%
EPS Next Y-6.04%
EPS Next 2Y0.29%
EPS Next 3Y3.15%
EPS Next 5Y11.57%
Revenue 1Y (TTM)-0.71%
Revenue growth 3Y6.65%
Revenue growth 5Y9.81%
Sales Q2Q%-4.31%
Revenue Next Year-3.47%
Revenue Next 2Y0.3%
Revenue Next 3Y1.8%
Revenue Next 5Y8.19%
EBIT growth 1Y0.38%
EBIT growth 3Y7.24%
EBIT growth 5Y16.07%
EBIT Next Year-0.44%
EBIT Next 3Y6.2%
EBIT Next 5Y10.74%
FCF growth 1Y17.12%
FCF growth 3Y31.86%
FCF growth 5Y18.5%
OCF growth 1Y15.18%
OCF growth 3Y30.29%
OCF growth 5Y18.15%
WATSCO INC / WSO FAQ
What is the fundamental rating for WSO stock?
ChartMill assigns a fundamental rating of 7 / 10 to WSO.
What is the valuation status for WSO stock?
ChartMill assigns a valuation rating of 3 / 10 to WATSCO INC (WSO). This can be considered as Overvalued.
What is the profitability of WSO stock?
WATSCO INC (WSO) has a profitability rating of 8 / 10.
What is the earnings growth outlook for WATSCO INC?
The Earnings per Share (EPS) of WATSCO INC (WSO) is expected to decline by -6.04% in the next year.
How sustainable is the dividend of WATSCO INC (WSO) stock?
The dividend rating of WATSCO INC (WSO) is 7 / 10 and the dividend payout ratio is 95.01%.