WATSCO INC (WSO) Fundamental Analysis & Valuation

NYSE:WSO • US9426222009

Current stock price

438.47 USD
-18.39 (-4.03%)
At close:
432.072 USD
-6.4 (-1.46%)
After Hours:

This WSO fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

8

1. WSO Profitability Analysis

1.1 Basic Checks

  • WSO had positive earnings in the past year.
  • In the past year WSO had a positive cash flow from operations.
  • In the past 5 years WSO has always been profitable.
  • In the past 5 years WSO always reported a positive cash flow from operatings.
WSO Yearly Net Income VS EBIT VS OCF VS FCFWSO Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 200M 400M 600M 800M

1.2 Ratios

  • Looking at the Return On Assets, with a value of 10.47%, WSO belongs to the top of the industry, outperforming 86.96% of the companies in the same industry.
  • The Return On Equity of WSO (16.62%) is better than 73.91% of its industry peers.
  • With an excellent Return On Invested Capital value of 14.88%, WSO belongs to the best of the industry, outperforming 89.13% 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 9.22%.
Industry RankSector Rank
ROA 10.47%
ROE 16.62%
ROIC 14.88%
ROA(3y)11.68%
ROA(5y)12.63%
ROE(3y)19.29%
ROE(5y)21.98%
ROIC(3y)17.4%
ROIC(5y)19.52%
WSO Yearly ROA, ROE, ROICWSO Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 5 10 15 20 25

1.3 Margins

  • WSO's Profit Margin of 6.39% is fine compared to the rest of the industry. WSO outperforms 71.74% of its industry peers.
  • WSO's Profit Margin has improved in the last couple of years.
  • WSO has a better Operating Margin (9.57%) than 76.09% of its industry peers.
  • In the last couple of years the Operating Margin of WSO has grown nicely.
  • WSO has a Gross Margin (28.05%) which is comparable to the rest of the industry.
  • In the last couple of years the Gross Margin of WSO has grown nicely.
Industry RankSector Rank
OM 9.57%
PM (TTM) 6.39%
GM 28.05%
OM growth 3Y-4.89%
OM growth 5Y4.41%
PM growth 3Y-5.33%
PM growth 5Y5.63%
GM growth 3Y0.16%
GM growth 5Y3%
WSO Yearly Profit, Operating, Gross MarginsWSO Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 5 10 15 20 25

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9

2. WSO Health Analysis

2.1 Basic Checks

  • WSO has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it 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.
WSO Yearly Shares OutstandingWSO Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10M 20M 30M 40M
WSO Yearly Total Debt VS Total AssetsWSO Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1B 2B 3B 4B

2.2 Solvency

  • WSO has an Altman-Z score of 9.72. This indicates that WSO is financially healthy and has little risk of bankruptcy at the moment.
  • The Altman-Z score of WSO (9.72) is better than 95.65% of its industry peers.
  • 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.
  • With an excellent Debt to FCF ratio value of 0.02, WSO belongs to the best of the industry, outperforming 97.83% of the companies in the same industry.
  • A Debt/Equity ratio of 0.00 indicates that WSO is not too dependend on debt financing.
  • WSO has a Debt to Equity ratio of 0.00. This is amongst the best in the industry. WSO outperforms 84.78% of its industry peers.
Industry RankSector Rank
Debt/Equity 0
Debt/FCF 0.02
Altman-Z 9.72
ROIC/WACC1.62
WACC9.2%
WSO Yearly LT Debt VS Equity VS FCFWSO Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 500M 1B 1.5B 2B 2.5B

2.3 Liquidity

  • A Current Ratio of 4.12 indicates that WSO has no problem at all paying its short term obligations.
  • The Current ratio of WSO (4.12) is better than 91.30% of its industry peers.
  • A Quick Ratio of 2.18 indicates that WSO has no problem at all paying its short term obligations.
  • WSO has a Quick ratio of 2.18. This is amongst the best in the industry. WSO outperforms 80.43% of its industry peers.
Industry RankSector Rank
Current Ratio 4.12
Quick Ratio 2.18
WSO Yearly Current Assets VS Current LiabilitesWSO Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1B 2B 3B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

5

3. WSO Growth Analysis

3.1 Past

  • WSO shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -7.35%.
  • WSO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 11.98% yearly.
  • The Revenue has decreased by -4.98% in the past year.
  • The Revenue has been growing slightly by 7.45% on average over the past years.
EPS 1Y (TTM)-7.35%
EPS 3Y-7.71%
EPS 5Y11.98%
EPS Q2Q%-3.11%
Revenue 1Y (TTM)-4.98%
Revenue growth 3Y-0.16%
Revenue growth 5Y7.45%
Sales Q2Q%0.13%

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 19.57% yearly.
  • WSO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.44% yearly.
EPS Next Y5.69%
EPS Next 2Y7.4%
EPS Next 3Y10.42%
EPS Next 5Y19.57%
Revenue Next Year1.52%
Revenue Next 2Y3.35%
Revenue Next 3Y4.23%
Revenue Next 5Y8.44%

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 accelerating.
  • The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
WSO Yearly Revenue VS EstimatesWSO Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2B 4B 6B 8B 10B
WSO Yearly EPS VS EstimatesWSO Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 5 10 15 20 25

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2

4. WSO Valuation Analysis

4.1 Price/Earnings Ratio

  • Based on the Price/Earnings ratio of 36.39, the valuation of WSO can be described as expensive.
  • The rest of the industry has a similar Price/Earnings ratio as WSO.
  • Compared to an average S&P500 Price/Earnings ratio of 26.91, WSO is valued a bit more expensive.
  • The Price/Forward Earnings ratio is 31.38, which means the current valuation is very expensive for WSO.
  • WSO's Price/Forward Earnings is on the same level as the industry average.
  • The average S&P500 Price/Forward Earnings ratio is at 21.99. WSO is valued slightly more expensive when compared to this.
Industry RankSector Rank
PE 36.39
Fwd PE 31.38
WSO Price Earnings VS Forward Price EarningsWSO Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40

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 71.74% of the companies listed in the same industry.
  • Based on the Price/Free Cash Flow ratio, WSO is valued a bit cheaper than 69.57% of the companies in the same industry.
Industry RankSector Rank
P/FCF 33.25
EV/EBITDA 22.78
WSO Per share dataWSO EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 50 100 150

4.3 Compensation for Growth

  • The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
  • WSO has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)6.39
PEG (5Y)3.04
EPS Next 2Y7.4%
EPS Next 3Y10.42%

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Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

7

5. WSO Dividend Analysis

5.1 Amount

  • WSO has a Yearly Dividend Yield of 3.17%. Purely for dividend investing, there may be better candidates out there.
  • WSO's Dividend Yield is rather good when compared to the industry average which is at 0.76. WSO pays more dividend than 93.48% of the companies in the same industry.
  • WSO's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
Industry RankSector Rank
Dividend Yield 3.17%

5.2 History

  • On average, the dividend of WSO grows each year by 11.59%, which is quite nice.
  • 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)11.59%
Div Incr Years12
Div Non Decr Years12
WSO Yearly Dividends per shareWSO Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2 4 6 8 10

5.3 Sustainability

  • WSO pays out 102.49% of its income as dividend. This is not a sustainable payout ratio.
  • WSO's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP102.49%
EPS Next 2Y7.4%
EPS Next 3Y10.42%
WSO Yearly Income VS Free CF VS DividendWSO Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 200M 400M 600M
WSO Dividend Payout.WSO Dividend Payout, showing the Payout Ratio.WSO Dividend Payout.PayoutRetained Earnings

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WSO Fundamentals: All Metrics, Ratios and Statistics

WATSCO INC

NYSE:WSO (4/28/2026, 8:05:56 PM)

After market: 432.072 -6.4 (-1.46%)

438.47

-18.39 (-4.03%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Industry Strength70.81
Industry Growth45.96
Earnings (Last)04-28
Earnings (Next)N/A
Inst Owners110.58%
Inst Owner Change-0.06%
Ins Owners0.38%
Ins Owner Change0%
Market Cap17.79B
Revenue(TTM)7.24B
Net Income(TTM)462.26M
Analysts66
Price Target422.85 (-3.56%)
Short Float %10.54%
Short Ratio7.73
Dividend
Industry RankSector Rank
Dividend Yield 3.17%
Yearly Dividend10.64
Dividend Growth(5Y)11.59%
DP102.49%
Div Incr Years12
Div Non Decr Years12
Ex-Date04-16
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-8.83%
Min EPS beat(2)-11.57%
Max EPS beat(2)-6.09%
EPS beat(4)0
Avg EPS beat(4)-9.91%
Min EPS beat(4)-15.33%
Max EPS beat(4)-6.09%
EPS beat(8)1
Avg EPS beat(8)-6.53%
EPS beat(12)3
Avg EPS beat(12)-4.99%
EPS beat(16)5
Avg EPS beat(16)3.47%
Revenue beat(2)0
Avg Revenue beat(2)-4.09%
Min Revenue beat(2)-4.61%
Max Revenue beat(2)-3.56%
Revenue beat(4)0
Avg Revenue beat(4)-6.28%
Min Revenue beat(4)-8.58%
Max Revenue beat(4)-3.56%
Revenue beat(8)1
Avg Revenue beat(8)-3.9%
Revenue beat(12)2
Avg Revenue beat(12)-3.56%
Revenue beat(16)3
Avg Revenue beat(16)-2.52%
PT rev (1m)0.35%
PT rev (3m)3.49%
EPS NQ rev (1m)0.64%
EPS NQ rev (3m)-9.52%
EPS NY rev (1m)0.14%
EPS NY rev (3m)-2.57%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-4.52%
Revenue NY rev (1m)-0.37%
Revenue NY rev (3m)-1.93%
Valuation
Industry RankSector Rank
PE 36.39
Fwd PE 31.38
P/S 2.46
P/FCF 33.25
P/OCF 31.24
P/B 6.4
P/tB 8.44
EV/EBITDA 22.78
EPS(TTM)12.05
EY2.75%
EPS(NY)13.97
Fwd EY3.19%
FCF(TTM)13.19
FCFY3.01%
OCF(TTM)14.04
OCFY3.2%
SpS178.4
BVpS68.54
TBVpS51.96
PEG (NY)6.39
PEG (5Y)3.04
Graham Number136.32 (-68.91%)
Profitability
Industry RankSector Rank
ROA 10.47%
ROE 16.62%
ROCE 18.73%
ROIC 14.88%
ROICexc 18.56%
ROICexgc 24.01%
OM 9.57%
PM (TTM) 6.39%
GM 28.05%
FCFM 7.39%
ROA(3y)11.68%
ROA(5y)12.63%
ROE(3y)19.29%
ROE(5y)21.98%
ROIC(3y)17.4%
ROIC(5y)19.52%
ROICexc(3y)20.77%
ROICexc(5y)22.06%
ROICexgc(3y)27.24%
ROICexgc(5y)29.35%
ROCE(3y)21.9%
ROCE(5y)24.57%
ROICexgc growth 3Y-11.92%
ROICexgc growth 5Y-0.32%
ROICexc growth 3Y-11.07%
ROICexc growth 5Y2.11%
OM growth 3Y-4.89%
OM growth 5Y4.41%
PM growth 3Y-5.33%
PM growth 5Y5.63%
GM growth 3Y0.16%
GM growth 5Y3%
F-Score6
Asset Turnover1.64
Health
Industry RankSector Rank
Debt/Equity 0
Debt/FCF 0.02
Debt/EBITDA 0.01
Cap/Depr 78.97%
Cap/Sales 0.48%
Interest Coverage 993.66
Cash Conversion 77.36%
Profit Quality 115.75%
Current Ratio 4.12
Quick Ratio 2.18
Altman-Z 9.72
F-Score6
WACC9.2%
ROIC/WACC1.62
Cap/Depr(3y)84.59%
Cap/Depr(5y)91.37%
Cap/Sales(3y)0.45%
Cap/Sales(5y)0.45%
Profit Quality(3y)123.21%
Profit Quality(5y)110.42%
High Growth Momentum
Growth
EPS 1Y (TTM)-7.35%
EPS 3Y-7.71%
EPS 5Y11.98%
EPS Q2Q%-3.11%
EPS Next Y5.69%
EPS Next 2Y7.4%
EPS Next 3Y10.42%
EPS Next 5Y19.57%
Revenue 1Y (TTM)-4.98%
Revenue growth 3Y-0.16%
Revenue growth 5Y7.45%
Sales Q2Q%0.13%
Revenue Next Year1.52%
Revenue Next 2Y3.35%
Revenue Next 3Y4.23%
Revenue Next 5Y8.44%
EBIT growth 1Y-7.81%
EBIT growth 3Y-5.04%
EBIT growth 5Y12.18%
EBIT Next Year6.81%
EBIT Next 3Y9.56%
EBIT Next 5Y18.01%
FCF growth 1Y-27.99%
FCF growth 3Y-0.08%
FCF growth 5Y0.65%
OCF growth 1Y-26.32%
OCF growth 3Y-0.14%
OCF growth 5Y1.29%

WATSCO INC / WSO Fundamental Analysis FAQ

What is the fundamental rating for WSO stock?

ChartMill assigns a fundamental rating of 7 / 10 to WSO.


Can you provide the valuation status for WATSCO INC?

ChartMill assigns a valuation rating of 2 / 10 to WATSCO INC (WSO). This can be considered as Overvalued.


How profitable is WATSCO INC (WSO) stock?

WATSCO INC (WSO) has a profitability rating of 8 / 10.


Can you provide the financial health for WSO stock?

The financial health rating of WATSCO INC (WSO) is 9 / 10.


Can you provide the expected EPS growth for WSO stock?

The Earnings per Share (EPS) of WATSCO INC (WSO) is expected to grow by 5.69% in the next year.