WATSCO INC (WSO) Fundamental Analysis & Valuation

NYSE:WSO • US9426222009

400.87 USD
-4.16 (-1.03%)
At close: Mar 5, 2026
405.03 USD
+4.16 (+1.04%)
After Hours: 3/5/2026, 8:26:56 PM
Overview Stock Chart Technical Analysis Fundamental Analysis Forecast Earnings Financials Ownership News

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

Fundamental Rating

6

WSO gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 47 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 does not seem to be growing, but still is valued expensively. Finally WSO also has an excellent dividend rating. These ratings would make WSO suitable for dividend investing!


Dividend Valuation Growth Profitability Health

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.
  • Each year in the past 5 years WSO has been profitable.
  • WSO had a positive operating cash flow in each of the past 5 years.
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

  • With an excellent Return On Assets value of 10.40%, WSO belongs to the best of the industry, outperforming 89.36% of the companies in the same industry.
  • WSO has a better Return On Equity (16.50%) than 76.60% of its industry peers.
  • WSO's Return On Invested Capital of 14.88% is amongst the best of the industry. WSO outperforms 89.36% 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 9.12%.
Industry RankSector Rank
ROA 10.4%
ROE 16.5%
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

  • Looking at the Profit Margin, with a value of 6.34%, WSO is in the better half of the industry, outperforming 72.34% of the companies in the same industry.
  • WSO's Profit Margin has improved in the last couple of years.
  • Looking at the Operating Margin, with a value of 9.57%, WSO is in the better half of the industry, outperforming 74.47% of the companies in the same industry.
  • WSO's Operating Margin has improved in the last couple of years.
  • WSO has a Gross Margin (28.05%) which is comparable to the rest of the industry.
  • WSO's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 9.57%
PM (TTM) 6.34%
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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ROAROEROICOperating and Profit MarginShow most profitable peers

8

2. WSO Health Analysis

2.1 Basic Checks

  • The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so WSO is still creating some value.
  • Compared to 1 year ago, WSO has less shares outstanding
  • The number of shares outstanding for WSO has been reduced compared to 5 years ago.
  • 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.
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

  • 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 RankSector Rank
Debt/Equity 0
Debt/FCF 0
Altman-Z N/A
ROIC/WACC1.54
WACC9.68%
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

  • 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.
  • WSO's Current ratio of 4.12 is amongst the best of the industry. WSO outperforms 93.62% of its industry peers.
  • A Quick Ratio of 2.18 indicates that WSO has no problem at all paying its short term obligations.
  • Looking at the Quick ratio, with a value of 2.18, WSO belongs to the top of the industry, outperforming 85.11% of the companies in the same industry.
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

3

3. WSO Growth Analysis

3.1 Past

  • The earnings per share for WSO have decreased by -8.57% in the last year.
  • The Earnings Per Share has been growing by 11.98% on average over the past years. This is quite good.
  • WSO shows a decrease in Revenue. In the last year, the revenue decreased by -4.98%.
  • The Revenue has been growing slightly by 7.45% on average over the past years.
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 14.30% on average per year.
  • Based on estimates for the next years, WSO will show a small growth in Revenue. The Revenue will grow by 5.55% on average per year.
EPS Next Y8.48%
EPS Next 2Y8.37%
EPS Next 3Y12.88%
EPS Next 5Y14.3%
Revenue Next Year3.96%
Revenue Next 2Y4.87%
Revenue Next 3Y4.82%
Revenue Next 5Y5.55%

3.3 Evolution

  • The EPS growth rate is stable: in the next years the growth will be about the same 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.
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

More info and screens

Find the best growth stocksShow best growing peers

3

4. WSO Valuation Analysis

4.1 Price/Earnings Ratio

  • WSO is valuated quite expensively with a Price/Earnings ratio of 33.10.
  • WSO's Price/Earnings is on the same level as the industry average.
  • Compared to an average S&P500 Price/Earnings ratio of 26.74, WSO is valued a bit more expensive.
  • The Price/Forward Earnings ratio is 30.50, which means the current valuation is very expensive for WSO.
  • WSO's Price/Forward Earnings is on the same level as the industry average.
  • WSO's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 24.82.
Industry RankSector Rank
PE 33.1
Fwd PE 30.5
WSO Price Earnings VS Forward Price EarningsWSO Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

  • 63.83% of the companies in the same industry are cheaper than WSO, based on the Enterprise Value to EBITDA ratio.
  • 61.70% of the companies in the same industry are more expensive than WSO, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 30.36
EV/EBITDA 20.91
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 WSO does not grow enough to justify the current Price/Earnings ratio.
  • WSO has an outstanding profitability rating, which may justify a higher PE ratio.
  • WSO's earnings are expected to grow with 12.88% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.9
PEG (5Y)2.76
EPS Next 2Y8.37%
EPS Next 3Y12.88%

More info and screens

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 3.19%. Purely for dividend investing, there may be better candidates out there.
  • Compared to an average industry Dividend Yield of 0.80, WSO pays a better dividend. On top of this WSO pays more dividend than 93.62% 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 1.82.
Industry RankSector Rank
Dividend Yield 3.19%

5.2 History

  • The dividend of WSO is nicely growing with an annual growth rate of 12.64%!
  • 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)12.64%
Div Incr Years11
Div Non Decr Years11
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 103.23% 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.
DP103.23%
EPS Next 2Y8.37%
EPS Next 3Y12.88%
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

More info and screens

Find the best dividend stocksShow peers with best dividend

WSO Fundamentals: All Metrics, Ratios and Statistics

WATSCO INC

NYSE:WSO (3/5/2026, 8:26:56 PM)

After market: 405.03 +4.16 (+1.04%)

400.87

-4.16 (-1.03%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)02-17
Earnings (Next)04-21
Inst Owners112.05%
Inst Owner Change4.55%
Ins Owners0.38%
Ins Owner Change0%
Market Cap16.26B
Revenue(TTM)7.24B
Net Income(TTM)458.95M
Analysts66
Price Target421.36 (5.11%)
Short Float %10.11%
Short Ratio8.61
Dividend
Industry RankSector Rank
Dividend Yield 3.19%
Yearly Dividend11.15
Dividend Growth(5Y)12.64%
DP103.23%
Div Incr Years11
Div Non Decr Years11
Ex-Date01-16
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)3.12%
PT rev (3m)0.91%
EPS NQ rev (1m)-7.68%
EPS NQ rev (3m)-11.54%
EPS NY rev (1m)0%
EPS NY rev (3m)-4.47%
Revenue NQ rev (1m)-3.44%
Revenue NQ rev (3m)-3.8%
Revenue NY rev (1m)0.42%
Revenue NY rev (3m)-2.13%
Valuation
Industry RankSector Rank
PE 33.1
Fwd PE 30.5
P/S 2.25
P/FCF 30.36
P/OCF 28.54
P/B 5.85
P/tB 8.51
EV/EBITDA 20.91
EPS(TTM)12.11
EY3.02%
EPS(NY)13.14
Fwd EY3.28%
FCF(TTM)13.2
FCFY3.29%
OCF(TTM)14.04
OCFY3.5%
SpS178.48
BVpS68.57
TBVpS47.08
PEG (NY)3.9
PEG (5Y)2.76
Graham Number136.69
Profitability
Industry RankSector Rank
ROA 10.4%
ROE 16.5%
ROCE 18.73%
ROIC 14.88%
ROICexc 18.56%
ROICexgc 26.3%
OM 9.57%
PM (TTM) 6.34%
GM 28.05%
FCFM 7.4%
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)28%
ROICexgc(5y)29.8%
ROCE(3y)21.9%
ROCE(5y)24.57%
ROICexgc growth 3Y-9.21%
ROICexgc growth 5Y1.51%
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
Debt/EBITDA 0
Cap/Depr 77.92%
Cap/Sales 0.47%
Interest Coverage 250
Cash Conversion 77.36%
Profit Quality 116.68%
Current Ratio 4.12
Quick Ratio 2.18
Altman-Z N/A
F-Score6
WACC9.68%
ROIC/WACC1.54
Cap/Depr(3y)84.25%
Cap/Depr(5y)91.16%
Cap/Sales(3y)0.45%
Cap/Sales(5y)0.45%
Profit Quality(3y)123.24%
Profit Quality(5y)110.44%
High Growth Momentum
Growth
EPS 1Y (TTM)-8.57%
EPS 3Y-7.71%
EPS 5Y11.98%
EPS Q2Q%-29.11%
EPS Next Y8.48%
EPS Next 2Y8.37%
EPS Next 3Y12.88%
EPS Next 5Y14.3%
Revenue 1Y (TTM)-4.98%
Revenue growth 3Y-0.16%
Revenue growth 5Y7.45%
Sales Q2Q%-9.99%
Revenue Next Year3.96%
Revenue Next 2Y4.87%
Revenue Next 3Y4.82%
Revenue Next 5Y5.55%
EBIT growth 1Y-7.81%
EBIT growth 3Y-5.04%
EBIT growth 5Y12.18%
EBIT Next Year9.21%
EBIT Next 3Y9.93%
EBIT Next 5Y20.39%
FCF growth 1Y-27.93%
FCF growth 3Y-0.05%
FCF growth 5Y0.67%
OCF growth 1Y-26.32%
OCF growth 3Y-0.14%
OCF growth 5Y1.29%

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 7 / 10 and the dividend payout ratio is 103.23%.