WATSCO INC (WSO) Fundamental Analysis & Valuation
NYSE:WSO • US9426222009
Current stock price
381.89 USD
+7.44 (+1.99%)
At close:
381.89 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.
- In the past year WSO had a positive cash flow from operations.
- WSO had positive earnings in each of the past 5 years.
- Each year in the past 5 years WSO had a positive operating cash flow.
1.2 Ratios
- WSO's Return On Assets of 10.47% is amongst the best of the industry. WSO outperforms 87.23% of its industry peers.
- WSO's Return On Equity of 16.62% is fine compared to the rest of the industry. WSO outperforms 74.47% of its industry peers.
- WSO's Return On Invested Capital of 14.88% is amongst the best of the industry. WSO outperforms 87.23% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for WSO is significantly above the industry average of 9.20%.
| 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
- WSO's Profit Margin of 6.39% is fine compared to the rest of the industry. WSO outperforms 70.21% 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 74.47% of its industry peers.
- WSO's Operating Margin has improved in the last couple of years.
- WSO's Gross Margin of 28.05% is in line compared to the rest of the industry. WSO outperforms 48.94% of its industry peers.
- 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) well above the Cost of Capital (WACC), WSO is creating value.
- Compared to 1 year ago, WSO has more shares outstanding
- The number of shares outstanding for WSO has been increased compared to 5 years ago.
- WSO has a better debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 8.77 indicates that WSO is not in any danger for bankruptcy at the moment.
- With an excellent Altman-Z score value of 8.77, WSO belongs to the best of the industry, outperforming 91.49% 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.
- With an excellent Debt to FCF ratio value of 0.02, WSO belongs to the best of the industry, outperforming 93.62% of the companies in the same industry.
- WSO has a Debt/Equity ratio of 0.00. This is a healthy value indicating a solid balance between debt and equity.
- WSO's Debt to Equity ratio of 0.00 is amongst the best of the industry. WSO outperforms 82.98% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.02 | ||
| Altman-Z | 8.77 |
ROIC/WACC1.68
WACC8.86%
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 93.62% 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's Quick ratio of 2.18 is amongst the best of the industry. WSO outperforms 85.11% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.12 | ||
| Quick Ratio | 2.18 |
3. WSO Growth Analysis
3.1 Past
- WSO shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -8.57%.
- WSO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 11.98% yearly.
- Looking at the last year, WSO shows a decrease in Revenue. The Revenue has decreased by -4.98% in the last year.
- Measured over the past years, WSO shows a small growth in Revenue. The Revenue has been growing by 7.45% on average per year.
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
- WSO is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 19.57% yearly.
- Based on estimates for the next years, WSO will show a quite strong growth in Revenue. The Revenue will grow by 8.44% on average per year.
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.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. WSO Valuation Analysis
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 31.54 indicates a quite expensive valuation of WSO.
- WSO's Price/Earnings ratio is in line with the industry average.
- WSO is valuated rather expensively when we compare the Price/Earnings ratio to 26.11, which is the current average of the S&P500 Index.
- WSO is valuated quite expensively with a Price/Forward Earnings ratio of 29.87.
- WSO's Price/Forward Earnings ratio is in line with the industry average.
- When comparing the Price/Forward Earnings ratio of WSO to the average of the S&P500 Index (24.12), we can say WSO is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.54 | ||
| Fwd PE | 29.87 |
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 65.96% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, WSO is valued a bit cheaper than the industry average as 65.96% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.96 | ||
| EV/EBITDA | 19.25 |
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)5.69
PEG (5Y)2.63
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 0.91. WSO pays more dividend than 91.49% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.91, 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 their dividend for at least 10 years, which is a reliable track record.
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.
- WSO's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP102.49%
EPS Next 2Y7.49%
EPS Next 3Y10.94%
WSO Fundamentals: All Metrics, Ratios and Statistics
381.89
+7.44 (+1.99%)
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 Cap15.50B
Revenue(TTM)7.24B
Net Income(TTM)462.26M
Analysts66
Price Target421.36 (10.34%)
Short Float %8.95%
Short Ratio7.64
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 | 31.54 | ||
| Fwd PE | 29.87 | ||
| P/S | 2.14 | ||
| P/FCF | 28.96 | ||
| P/OCF | 27.21 | ||
| P/B | 5.57 | ||
| P/tB | 7.35 | ||
| EV/EBITDA | 19.25 |
EPS(TTM)12.11
EY3.17%
EPS(NY)12.79
Fwd EY3.35%
FCF(TTM)13.19
FCFY3.45%
OCF(TTM)14.04
OCFY3.68%
SpS178.4
BVpS68.54
TBVpS51.96
PEG (NY)5.69
PEG (5Y)2.63
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 | 8.77 |
F-Score6
WACC8.86%
ROIC/WACC1.68
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 2 / 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%.