WATSCO INC (WSO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:WSO - US9426222009 - Common Stock
376.82 USD
-4.74 (-1.24%)
376.82 USD
0 (0%)
Overall WSO gets a fundamental rating of 6 out of 10. We evaluated WSO against 50 industry peers in the Trading Companies & Distributors industry. Both the health and profitability get an excellent rating, making WSO a very profitable company, without any liquidiy or solvency issues. WSO is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- In the past year WSO was profitable.
- 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 10.66%, WSO belongs to the top of the industry, outperforming 82.00% of the companies in the same industry.
- The Return On Equity of WSO (17.24%) is better than 70.00% of its industry peers.
- The Return On Invested Capital of WSO (15.48%) is better than 90.00% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for WSO 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
- WSO's Profit Margin of 6.55% is fine compared to the rest of the industry. WSO outperforms 68.00% of its industry peers.
- WSO's Profit Margin has improved in the last couple of years.
- WSO's Operating Margin of 9.80% is fine compared to the rest of the industry. WSO outperforms 68.00% of its industry peers.
- WSO's Operating Margin has improved in the last couple of years.
- WSO has a Gross Margin (27.92%) which is in line with its industry peers.
- 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 5Y6.73%
GM growth 3Y0.36%
GM growth 5Y2.05%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), WSO is creating value.
- Compared to 1 year ago, WSO has more shares outstanding
- Compared to 5 years ago, WSO has more shares outstanding
- WSO has a better debt/assets ratio than last year.
2.2 Solvency
- WSO has an Altman-Z score of 8.45. This indicates that WSO is financially healthy and has little risk of bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 8.45, WSO belongs to the top of the industry, outperforming 92.00% of the companies in the same industry.
- 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 90.00% 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.
- With an excellent Debt to Equity ratio value of 0.00, WSO belongs to the best of the industry, outperforming 84.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.02 | ||
| Altman-Z | 8.45 |
ROIC/WACC1.58
WACC9.78%
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 86.00% 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.
- WSO's Quick ratio of 1.86 is fine compared to the rest of the industry. WSO outperforms 70.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.84 | ||
| Quick Ratio | 1.86 |
3. Growth
3.1 Past
- WSO shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -1.05%.
- WSO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.67% yearly.
- Looking at the last year, WSO shows a decrease in Revenue. The Revenue has decreased by -0.71% in the last 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
- The Earnings Per Share is expected to grow by 9.95% on average over the next years. This is quite good.
- The Revenue is expected to grow by 3.59% on average over the next years.
EPS Next Y-6.04%
EPS Next 2Y0.01%
EPS Next 3Y2.86%
EPS Next 5Y9.95%
Revenue Next Year-3.46%
Revenue Next 2Y-0.03%
Revenue Next 3Y1.65%
Revenue Next 5Y3.59%
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less than in the last 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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 29.44, WSO can be considered very expensive at the moment.
- Compared to the rest of the industry, the Price/Earnings ratio of WSO is on the same level as its industry peers.
- WSO is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.94, which is the current average of the S&P500 Index.
- WSO is valuated quite expensively with a Price/Forward Earnings ratio of 28.43.
- WSO's Price/Forward Earnings is on the same level as the industry average.
- When comparing the Price/Forward Earnings ratio of WSO to the average of the S&P500 Index (23.94), we can say WSO is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.44 | ||
| Fwd PE | 28.43 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, WSO is valued a bit more expensive than the industry average as 64.00% of the companies are valued more cheaply.
- Based on the Price/Free Cash Flow ratio, WSO is valued a bit cheaper than 66.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.54 | ||
| EV/EBITDA | 19.09 |
4.3 Compensation for Growth
- WSO has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.88
EPS Next 2Y0.01%
EPS Next 3Y2.86%
5. Dividend
5.1 Amount
- WSO has a Yearly Dividend Yield of 3.19%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 1.48, WSO pays a better dividend. On top of this WSO pays more dividend than 86.00% of the companies listed in the same industry.
- WSO's Dividend Yield is rather good when compared to the S&P500 average which is at 1.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.19% |
5.2 History
- On average, the dividend of WSO grows each year by 11.05%, 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)11.05%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
- 95.01% of the earnings are spent on dividend by WSO. This is not a sustainable payout ratio.
- WSO's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP95.01%
EPS Next 2Y0.01%
EPS Next 3Y2.86%
376.82
-4.74 (-1.24%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)10-29 2025-10-29/bmo
Earnings (Next)02-16 2026-02-16/amc
Inst Owners112.05%
Inst Owner Change0.12%
Ins Owners0.38%
Ins Owner Change0%
Market Cap15.28B
Revenue(TTM)7.41B
Net Income(TTM)485.36M
Analysts66
Price Target408.6 (8.43%)
Short Float %9.13%
Short Ratio8.05
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.19% |
Yearly Dividend9.55
Dividend Growth(5Y)11.05%
DP95.01%
Div Incr Years11
Div Non Decr Years11
Ex-Date01-16 2026-01-16 (3)
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)-2.14%
PT rev (3m)-13.46%
EPS NQ rev (1m)0.94%
EPS NQ rev (3m)-22.37%
EPS NY rev (1m)0%
EPS NY rev (3m)-9.45%
Revenue NQ rev (1m)-0.06%
Revenue NQ rev (3m)-7.45%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)-3.57%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.44 | ||
| Fwd PE | 28.43 | ||
| P/S | 2.06 | ||
| P/FCF | 29.54 | ||
| P/OCF | 27.85 | ||
| P/B | 5.43 | ||
| P/tB | 7.13 | ||
| EV/EBITDA | 19.09 |
EPS(TTM)12.8
EY3.4%
EPS(NY)13.25
Fwd EY3.52%
FCF(TTM)12.76
FCFY3.39%
OCF(TTM)13.53
OCFY3.59%
SpS182.8
BVpS69.4
TBVpS52.83
PEG (NY)N/A
PEG (5Y)1.88
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 5Y9.41%
OM growth 3Y0.55%
OM growth 5Y5.7%
PM growth 3Y2.52%
PM growth 5Y6.73%
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 | 8.45 |
F-Score6
WACC9.78%
ROIC/WACC1.58
Cap/Depr(3y)95.78%
Cap/Depr(5y)88.26%
Cap/Sales(3y)0.46%
Cap/Sales(5y)0.42%
Profit Quality(3y)117.3%
Profit Quality(5y)129.4%
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 2Y0.01%
EPS Next 3Y2.86%
EPS Next 5Y9.95%
Revenue 1Y (TTM)-0.71%
Revenue growth 3Y6.65%
Revenue growth 5Y9.81%
Sales Q2Q%-4.31%
Revenue Next Year-3.46%
Revenue Next 2Y-0.03%
Revenue Next 3Y1.65%
Revenue Next 5Y3.59%
EBIT growth 1Y0.38%
EBIT growth 3Y7.24%
EBIT growth 5Y16.07%
EBIT Next Year-0.31%
EBIT Next 3Y5.43%
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 6 / 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 8 / 10.
Is the dividend of WATSCO INC sustainable?
The dividend rating of WATSCO INC (WSO) is 6 / 10 and the dividend payout ratio is 95.01%.