WATSCO INC (WSO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:WSO - US9426222009 - Common Stock
375.5 USD
+14.74 (+4.09%)
375.5 USD
0 (0%)
We assign a fundamental rating of 6 out of 10 to WSO. WSO was compared to 50 industry peers in the Trading Companies & Distributors industry. WSO gets an excellent profitability rating and is at the same time showing great financial health properties. WSO is valied quite expensively at the moment, while it does show a decent growth rate.
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.
Each year in the past 5 years WSO has been profitable.
In the past 5 years WSO always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of WSO (10.66%) is better than 82.00% of its industry peers.
WSO has a better Return On Equity (17.24%) than 70.00% of its industry peers.
WSO's Return On Invested Capital of 15.48% is amongst the best of the industry. WSO outperforms 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
The Profit Margin of WSO (6.55%) is better than 68.00% of its industry peers.
In the last couple of years the Profit Margin of WSO has grown nicely.
WSO has a better Operating Margin (9.80%) than 68.00% 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 27.92%, WSO is in line with its industry, outperforming 46.00% of the companies in the same industry.
In the last couple of years the Gross Margin of WSO has grown nicely.
| 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 5Y6.74%
GM growth 3Y0.36%
GM growth 5Y2.05%
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.
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 8.43 indicates that WSO is not in any danger for bankruptcy at the moment.
WSO has a Altman-Z score of 8.43. This is amongst the best in the industry. WSO outperforms 92.00% 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 90.00% of its industry peers.
A Debt/Equity ratio of 0.00 indicates that WSO is not too dependend on debt financing.
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 | 8.43 |
ROIC/WACC1.58
WACC9.79%
2.3 Liquidity
A Current Ratio of 3.84 indicates that WSO has no problem at all paying its short term obligations.
WSO has a Current ratio of 3.84. This is amongst the best in the industry. WSO outperforms 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.
Looking at the Quick ratio, with a value of 1.86, WSO is in the better half of the industry, outperforming 70.00% of the companies in the same industry.
| 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%.
The Earnings Per Share has been growing by 15.67% on average over the past years. This is quite good.
The Revenue has decreased by -0.71% in the past 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.
WSO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.59% yearly.
EPS Next Y-6.04%
EPS Next 2Y0.01%
EPS Next 3Y2.86%
EPS Next 5Y9.95%
Revenue Next Year-3.47%
Revenue Next 2Y0.07%
Revenue Next 3Y1.8%
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 29.34, the valuation of WSO can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of WSO is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 27.19, WSO is valued at the same level.
WSO is valuated quite expensively with a Price/Forward Earnings ratio of 28.33.
The rest of the industry has a similar Price/Forward Earnings ratio as WSO.
The average S&P500 Price/Forward Earnings ratio is at 23.88. WSO is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.34 | ||
| Fwd PE | 28.33 |
4.2 Price Multiples
64.00% of the companies in the same industry are cheaper than WSO, based on the Enterprise Value to EBITDA ratio.
66.00% of the companies in the same industry are more expensive than WSO, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.43 | ||
| EV/EBITDA | 19.02 |
4.3 Compensation for Growth
The excellent profitability rating of WSO may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.87
EPS Next 2Y0.01%
EPS Next 3Y2.86%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.44%, 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 1.21. WSO pays more dividend than 90.00% of the companies in the same industry.
WSO's Dividend Yield is rather good when compared to the S&P500 average which is at 1.90.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.44% |
5.2 History
The dividend of WSO is nicely growing with an annual growth rate of 11.05%!
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)11.05%
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%
375.5
+14.74 (+4.09%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners112.05%
Inst Owner Change0%
Ins Owners0.38%
Ins Owner Change0%
Market Cap15.23B
Revenue(TTM)7.41B
Net Income(TTM)485.36M
Analysts66
Price Target414.41 (10.36%)
Short Float %9.26%
Short Ratio7.25
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.44% |
Yearly Dividend9.55
Dividend Growth(5Y)11.05%
DP95.01%
Div Incr Years11
Div Non Decr Years11
Ex-Date
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)-0.75%
PT rev (3m)-12.23%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-23.14%
EPS NY rev (1m)0%
EPS NY rev (3m)-9.45%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-7.4%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-3.58%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.34 | ||
| Fwd PE | 28.33 | ||
| P/S | 2.05 | ||
| P/FCF | 29.43 | ||
| P/OCF | 27.75 | ||
| P/B | 5.41 | ||
| P/tB | 7.11 | ||
| EV/EBITDA | 19.02 |
EPS(TTM)12.8
EY3.41%
EPS(NY)13.25
Fwd EY3.53%
FCF(TTM)12.76
FCFY3.4%
OCF(TTM)13.53
OCFY3.6%
SpS182.8
BVpS69.4
TBVpS52.83
PEG (NY)N/A
PEG (5Y)1.87
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 5Y9.42%
OM growth 3Y0.55%
OM growth 5Y5.7%
PM growth 3Y2.52%
PM growth 5Y6.74%
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 | 8.43 |
F-Score6
WACC9.79%
ROIC/WACC1.58
Cap/Depr(3y)95.78%
Cap/Depr(5y)88.24%
Cap/Sales(3y)0.46%
Cap/Sales(5y)0.42%
Profit Quality(3y)117.3%
Profit Quality(5y)129.41%
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-3.47%
Revenue Next 2Y0.07%
Revenue Next 3Y1.8%
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 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 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 95.01%.