WATSCO INC (WSO) Stock Fundamental Analysis
NYSE:WSO • US9426222009
410.2 USD
+2.38 (+0.58%)
Last: Feb 26, 2026, 10:52 AM
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 valued expensive and it does not seem to be growing. Finally WSO also has an excellent dividend rating. These ratings could make WSO a good candidate for dividend investing.
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
- WSO has a better Return On Assets (10.40%) than 84.00% of its industry peers.
- WSO has a better Return On Equity (16.50%) than 72.00% of its industry peers.
- WSO's Return On Invested Capital of 14.88% is amongst the best of the industry. WSO outperforms 90.00% 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 9.42%.
| Industry Rank | Sector 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%
1.3 Margins
- WSO has a Profit Margin of 6.34%. This is in the better half of the industry: WSO outperforms 70.00% of its industry peers.
- In the last couple of years the Profit Margin of WSO has grown nicely.
- With a decent Operating Margin value of 9.57%, WSO is doing good in the industry, outperforming 70.00% of the companies in the same industry.
- In the last couple of years the Operating Margin of WSO has grown nicely.
- WSO has a Gross Margin of 28.05%. This is comparable to the rest of the industry: WSO outperforms 46.00% of its industry peers.
- In the last couple of years the Gross Margin of WSO has grown nicely.
| Industry Rank | Sector 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%
2. Health
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.
- Compared to 1 year ago, WSO has less shares outstanding
- Compared to 5 years ago, WSO has less shares outstanding
- WSO has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
- WSO has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | N/A |
ROIC/WACC1.55
WACC9.57%
2.3 Liquidity
- A Current Ratio of 4.12 indicates that WSO has no problem at all paying its short term obligations.
- With an excellent Current ratio value of 4.12, WSO belongs to the best of the industry, outperforming 88.00% of the companies in the same industry.
- A Quick Ratio of 2.18 indicates that WSO has no problem at all paying its short term obligations.
- WSO has a better Quick ratio (2.18) than 80.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.12 | ||
| Quick Ratio | 2.18 |
3. Growth
3.1 Past
- WSO shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -8.57%.
- The Earnings Per Share has been growing by 11.98% on average over the past years. This is quite good.
- Looking at the last year, WSO shows a decrease in Revenue. The Revenue has decreased by -4.98% in the last year.
- 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
- The Earnings Per Share is expected to grow by 14.30% on average over the next years. This is quite good.
- The Revenue is expected to grow by 5.55% on average over the next years.
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
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
- 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
- The Price/Earnings ratio is 33.87, which means the current valuation is very expensive for WSO.
- Compared to the rest of the industry, the Price/Earnings ratio of WSO is on the same level as its industry peers.
- The average S&P500 Price/Earnings ratio is at 27.05. WSO is valued slightly more expensive when compared to this.
- The Price/Forward Earnings ratio is 31.21, which means the current valuation is very expensive for WSO.
- The rest of the industry has a similar Price/Forward Earnings ratio as WSO.
- When comparing the Price/Forward Earnings ratio of WSO to the average of the S&P500 Index (28.03), we can say WSO is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.87 | ||
| Fwd PE | 31.21 |
4.2 Price Multiples
- WSO's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. WSO is more expensive than 64.00% of the companies in the same industry.
- WSO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. WSO is cheaper than 70.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.07 | ||
| EV/EBITDA | 21.06 |
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)3.99
PEG (5Y)2.83
EPS Next 2Y8.37%
EPS Next 3Y12.88%
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.
- WSO's Dividend Yield is rather good when compared to the industry average which is at 1.11. WSO pays more dividend than 88.00% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.80, WSO pays a better dividend.
| Industry Rank | Sector 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 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)12.64%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
- WSO pays out 103.23% of its income as dividend. This is not a sustainable payout ratio.
- WSO's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP103.23%
EPS Next 2Y8.37%
EPS Next 3Y12.88%
NYSE:WSO (2/26/2026, 10:52:00 AM)
410.2
+2.38 (+0.58%)
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 Owners112.05%
Inst Owner Change4.52%
Ins Owners0.38%
Ins Owner Change0%
Market Cap16.64B
Revenue(TTM)7.24B
Net Income(TTM)458.95M
Analysts66
Price Target421.36 (2.72%)
Short Float %9.97%
Short Ratio8.02
Dividend
| Industry Rank | Sector 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 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)-1.12%
PT rev (3m)-3.24%
EPS NQ rev (1m)-0.24%
EPS NQ rev (3m)-0.98%
EPS NY rev (1m)0%
EPS NY rev (3m)-2.22%
Revenue NQ rev (1m)-0.12%
Revenue NQ rev (3m)-0.67%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)-1.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.87 | ||
| Fwd PE | 31.21 | ||
| P/S | 2.3 | ||
| P/FCF | 31.07 | ||
| P/OCF | 29.21 | ||
| P/B | 5.98 | ||
| P/tB | 8.71 | ||
| EV/EBITDA | 21.06 |
EPS(TTM)12.11
EY2.95%
EPS(NY)13.14
Fwd EY3.2%
FCF(TTM)13.2
FCFY3.22%
OCF(TTM)14.04
OCFY3.42%
SpS178.48
BVpS68.57
TBVpS47.08
PEG (NY)3.99
PEG (5Y)2.83
Graham Number136.69
Profitability
| Industry Rank | Sector 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 Rank | Sector 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
WACC9.57%
ROIC/WACC1.55
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%.