WATSCO INC (WSO) Fundamental Analysis & Valuation
NYSE:WSO • US9426222009
Current stock price
368.39 USD
+4.6 (+1.26%)
At close:
368.39 USD
0 (0%)
After Hours:
This WSO fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.
1. WSO Profitability Analysis
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.
- WSO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- WSO has a better Return On Assets (10.47%) than 89.13% of its industry peers.
- The Return On Equity of WSO (16.62%) is better than 76.09% of its industry peers.
- WSO's Return On Invested Capital of 14.88% is amongst the best of the industry. WSO outperforms 89.13% of its industry peers.
- WSO had an Average Return On Invested Capital over the past 3 years of 17.40%. This is significantly above the industry average of 9.03%.
| Industry Rank | Sector 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%
1.3 Margins
- The Profit Margin of WSO (6.39%) is better than 71.74% of its industry peers.
- In the last couple of years the Profit Margin of WSO has grown nicely.
- WSO has a Operating Margin of 9.57%. This is in the better half of the industry: WSO outperforms 76.09% 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 28.05%, WSO is in line with its industry, outperforming 47.83% of the companies in the same industry.
- WSO's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.57% | ||
| 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%
2. WSO Health Analysis
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), WSO is creating some value.
- The number of shares outstanding for WSO has been increased compared to 1 year ago.
- WSO has more shares outstanding than it did 5 years ago.
- Compared to 1 year ago, WSO has an improved debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 8.61 indicates that WSO is not in any danger for bankruptcy at the moment.
- WSO's Altman-Z score of 8.61 is amongst the best of the industry. WSO outperforms 91.30% of its industry peers.
- WSO 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.
- WSO has a Debt to FCF ratio of 0.02. This is amongst the best in the industry. WSO outperforms 93.48% of its industry peers.
- WSO has a Debt/Equity ratio of 0.00. This is a healthy value indicating a solid balance between debt and equity.
- The Debt to Equity ratio of WSO (0.00) is better than 82.61% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.02 | ||
| Altman-Z | 8.61 |
ROIC/WACC1.48
WACC10.08%
2.3 Liquidity
- WSO has a Current Ratio of 4.12. This indicates that WSO is financially healthy and has no problem in meeting its short term obligations.
- The Current ratio of WSO (4.12) is better than 93.48% of its industry peers.
- A Quick Ratio of 2.18 indicates that WSO has no problem at all paying its short term obligations.
- The Quick ratio of WSO (2.18) is better than 84.78% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.12 | ||
| Quick Ratio | 2.18 |
3. WSO Growth Analysis
3.1 Past
- The earnings per share for WSO have decreased by -8.57% in the last year.
- Measured over the past years, WSO shows a quite strong growth in Earnings Per Share. The EPS has been growing by 11.98% on average per year.
- WSO shows a decrease in Revenue. In the last year, the revenue decreased by -4.98%.
- WSO shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.45% yearly.
EPS 1Y (TTM)-8.57%
EPS 3Y-7.71%
EPS 5Y11.98%
EPS Q2Q%-29.11%
Revenue 1Y (TTM)-4.98%
Revenue growth 3Y-0.16%
Revenue growth 5Y7.45%
Sales Q2Q%-9.99%
3.2 Future
- Based on estimates for the next years, WSO will show a quite strong growth in Earnings Per Share. The EPS will grow by 19.57% on average per year.
- The Revenue is expected to grow by 8.44% on average over the next years. This is quite good.
EPS Next Y5.54%
EPS Next 2Y7.49%
EPS Next 3Y10.94%
EPS Next 5Y19.57%
Revenue Next Year1.89%
Revenue Next 2Y3.36%
Revenue Next 3Y4.31%
Revenue Next 5Y8.44%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. WSO Valuation Analysis
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 30.42 indicates a quite expensive valuation of WSO.
- Compared to the rest of the industry, the Price/Earnings ratio of WSO is on the same level as its industry peers.
- When comparing the Price/Earnings ratio of WSO to the average of the S&P500 Index (25.70), we can say WSO is valued inline with the index average.
- WSO is valuated quite expensively with a Price/Forward Earnings ratio of 28.81.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of WSO is on the same level as its industry peers.
- The average S&P500 Price/Forward Earnings ratio is at 23.84. WSO is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.42 | ||
| Fwd PE | 28.81 |
4.2 Price Multiples
- 63.04% of the companies in the same industry are cheaper than WSO, based on the Enterprise Value to EBITDA ratio.
- Based on the Price/Free Cash Flow ratio, WSO is valued a bit cheaper than 65.22% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.94 | ||
| EV/EBITDA | 18.66 |
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)5.49
PEG (5Y)2.54
EPS Next 2Y7.49%
EPS Next 3Y10.94%
5. WSO Dividend Analysis
5.1 Amount
- With a Yearly Dividend Yield of 3.19%, WSO has a reasonable but not impressive dividend return.
- WSO's Dividend Yield is rather good when compared to the industry average which is at 1.04. WSO pays more dividend than 91.30% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, WSO pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.19% |
5.2 History
- On average, the dividend of WSO grows each year by 11.59%, which is quite nice.
- WSO has been paying a dividend for at least 10 years, so it has 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)11.59%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
- WSO pays out 102.49% of its income as dividend. This is not a sustainable payout ratio.
- The dividend of WSO is growing, but earnings are growing more, so the dividend growth is sustainable.
DP102.49%
EPS Next 2Y7.49%
EPS Next 3Y10.94%
WSO Fundamentals: All Metrics, Ratios and Statistics
368.39
+4.6 (+1.26%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)02-17 2026-02-17/bmo
Earnings (Next)04-21 2026-04-21
Inst Owners110.99%
Inst Owner Change4.57%
Ins Owners0.38%
Ins Owner Change0%
Market Cap14.95B
Revenue(TTM)7.24B
Net Income(TTM)462.26M
Analysts66
Price Target421.36 (14.38%)
Short Float %10.11%
Short Ratio8.61
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.19% |
Yearly Dividend10.64
Dividend Growth(5Y)11.59%
DP102.49%
Div Incr Years11
Div Non Decr Years11
Ex-Date01-16 2026-01-16 (3)
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)4.29%
PT rev (3m)0.91%
EPS NQ rev (1m)-9.16%
EPS NQ rev (3m)-12.96%
EPS NY rev (1m)-2.71%
EPS NY rev (3m)-4.07%
Revenue NQ rev (1m)-4.52%
Revenue NQ rev (3m)-4.88%
Revenue NY rev (1m)-1.58%
Revenue NY rev (3m)-2.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.42 | ||
| Fwd PE | 28.81 | ||
| P/S | 2.07 | ||
| P/FCF | 27.94 | ||
| P/OCF | 26.24 | ||
| P/B | 5.37 | ||
| P/tB | 7.09 | ||
| EV/EBITDA | 18.66 |
EPS(TTM)12.11
EY3.29%
EPS(NY)12.79
Fwd EY3.47%
FCF(TTM)13.19
FCFY3.58%
OCF(TTM)14.04
OCFY3.81%
SpS178.4
BVpS68.54
TBVpS51.96
PEG (NY)5.49
PEG (5Y)2.54
Graham Number136.66
Profitability
| Industry Rank | Sector 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 Rank | Sector 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 | 8.61 |
F-Score6
WACC10.08%
ROIC/WACC1.48
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)-8.57%
EPS 3Y-7.71%
EPS 5Y11.98%
EPS Q2Q%-29.11%
EPS Next Y5.54%
EPS Next 2Y7.49%
EPS Next 3Y10.94%
EPS Next 5Y19.57%
Revenue 1Y (TTM)-4.98%
Revenue growth 3Y-0.16%
Revenue growth 5Y7.45%
Sales Q2Q%-9.99%
Revenue Next Year1.89%
Revenue Next 2Y3.36%
Revenue Next 3Y4.31%
Revenue Next 5Y8.44%
EBIT growth 1Y-7.81%
EBIT growth 3Y-5.04%
EBIT growth 5Y12.18%
EBIT Next Year8.08%
EBIT Next 3Y9.93%
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 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 financial health of WATSCO INC (WSO) stock?
The financial health rating of WATSCO INC (WSO) is 9 / 10.
Is the dividend of WATSCO INC sustainable?
The dividend rating of WATSCO INC (WSO) is 7 / 10 and the dividend payout ratio is 102.49%.