WATSCO INC (WSO)
US9426222009 - Common Stock
Taking everything into account, WSO scores 5 out of 10 in our fundamental rating. WSO was compared to 51 industry peers in the Trading Companies & Distributors industry. While WSO belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. WSO is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
WSO had positive earnings in the past year.
WSO had a positive operating cash flow in the past year.
In the past 5 years WSO has always been profitable.
Each year in the past 5 years WSO had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 10.73%, WSO belongs to the top of the industry, outperforming 86.27% of the companies in the same industry.
WSO has a Return On Equity of 17.98%. This is in the better half of the industry: WSO outperforms 70.59% of its industry peers.
With an excellent Return On Invested Capital value of 16.67%, WSO belongs to the best of the industry, outperforming 90.20% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for WSO is significantly above the industry average of 9.29%.
The last Return On Invested Capital (16.67%) for WSO is well below the 3 year average (22.74%), which needs to be investigated, but indicates that WSO had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.73% | ||
| ROE | 17.98% | ||
| ROIC | 16.67% |
ROA(3y)13.84%
ROA(5y)12.05%
ROE(3y)24.81%
ROE(5y)21.34%
ROIC(3y)22.74%
ROIC(5y)19.68%
1.3 Margins
WSO has a better Profit Margin (6.49%) than 64.71% of its industry peers.
In the last couple of years the Profit Margin of WSO has grown nicely.
The Operating Margin of WSO (9.69%) is better than 70.59% of its industry peers.
In the last couple of years the Operating Margin of WSO has grown nicely.
Looking at the Gross Margin, with a value of 26.66%, WSO is doing worse than 64.71% of the companies in the same industry.
WSO's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.69% | ||
| PM (TTM) | 6.49% | ||
| GM | 26.66% |
OM growth 3Y11.03%
OM growth 5Y5.75%
PM growth 3Y12.04%
PM growth 5Y6.92%
GM growth 3Y4.18%
GM growth 5Y2.11%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), WSO is creating value.
WSO has more shares outstanding than it did 1 year ago.
The number of shares outstanding for WSO has been increased compared to 5 years ago.
Compared to 1 year ago, WSO has an improved debt to assets ratio.
2.2 Solvency
There is no outstanding debt for WSO. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.16 | ||
| Altman-Z | N/A |
ROIC/WACC1.43
WACC11.64%
2.3 Liquidity
A Current Ratio of 3.36 indicates that WSO has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 3.36, WSO is in the better half of the industry, outperforming 74.51% of the companies in the same industry.
WSO has a Quick Ratio of 1.65. 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 Quick ratio value of 1.65, WSO perfoms like the industry average, outperforming 58.82% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.36 | ||
| Quick Ratio | 1.65 |
3. Growth
3.1 Past
WSO shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -14.59%.
WSO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 16.30% yearly.
Looking at the last year, WSO shows a small growth in Revenue. The Revenue has grown by 2.83% in the last year.
Measured over the past years, WSO shows a quite strong growth in Revenue. The Revenue has been growing by 9.88% on average per year.
EPS 1Y (TTM)-14.59%
EPS 3Y25.69%
EPS 5Y16.3%
EPS Q2Q%-2.99%
Revenue 1Y (TTM)2.83%
Revenue growth 3Y12.95%
Revenue growth 5Y9.88%
Sales Q2Q%1.56%
3.2 Future
The Earnings Per Share is expected to grow by 6.79% on average over the next years.
Based on estimates for the next years, WSO will show a small growth in Revenue. The Revenue will grow by 7.66% on average per year.
EPS Next Y-2.07%
EPS Next 2Y5%
EPS Next 3Y7.14%
EPS Next 5Y6.79%
Revenue Next Year2.78%
Revenue Next 2Y4.56%
Revenue Next 3Y5.22%
Revenue Next 5Y7.66%
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
WSO is valuated quite expensively with a Price/Earnings ratio of 42.21.
Based on the Price/Earnings ratio, WSO is valued a bit more expensive than 70.59% of the companies in the same industry.
WSO's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 28.96.
WSO is valuated quite expensively with a Price/Forward Earnings ratio of 36.27.
Based on the Price/Forward Earnings ratio, WSO is valued a bit more expensive than 68.63% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.82. WSO is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.21 | ||
| Fwd PE | 36.27 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WSO indicates a slightly more expensive valuation: WSO is more expensive than 76.47% of the companies listed in the same industry.
WSO's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 37.96 | ||
| EV/EBITDA | 31.94 |
4.3 Compensation for Growth
The excellent profitability rating of WSO may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.59
EPS Next 2Y5%
EPS Next 3Y7.14%
5. Dividend
5.1 Amount
WSO has a Yearly Dividend Yield of 2.05%.
WSO's Dividend Yield is rather good when compared to the industry average which is at 1.73. WSO pays more dividend than 88.24% of the companies in the same industry.
WSO's Dividend Yield is comparable with the S&P500 average which is at 2.23.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.05% |
5.2 History
On average, the dividend of WSO grows each year by 11.93%, which is quite nice.
WSO has paid a dividend for at least 10 years, which is a reliable track record.
WSO 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 Years10
Div Non Decr Years10
5.3 Sustainability
84.76% of the earnings are spent on dividend by WSO. This is not a sustainable payout ratio.
The dividend of WSO is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP84.76%
EPS Next 2Y5%
EPS Next 3Y7.14%
WATSCO INC
NYSE:WSO (11/21/2024, 8:04:00 PM)
After market: 546.24 0 (0%)546.24
+12.84 (+2.41%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap25.09B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.05% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
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Min EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
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Min Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
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Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.21 | ||
| Fwd PE | 36.27 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)2.59
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.73% | ||
| ROE | 17.98% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 9.69% | ||
| PM (TTM) | 6.49% | ||
| GM | 26.66% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.65
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 3.36 | ||
| Quick Ratio | 1.65 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)-14.59%
EPS 3Y25.69%
EPS 5Y
EPS Q2Q%
EPS Next Y-2.07%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)2.83%
Revenue growth 3Y12.95%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y