WATSCO INC (WSO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:WSO - US9426222009 - Common Stock
380.385 USD
+7.88 (+2.11%)
WSO gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 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. While showing a medium growth rate, WSO is valued expensive at the moment.
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
- The Return On Assets of WSO (10.66%) is better than 84.00% of its industry peers.
- WSO has a better Return On Equity (17.24%) than 72.00% of its industry peers.
- WSO has a better Return On Invested Capital (15.48%) than 92.00% of its industry peers.
- WSO had an Average Return On Invested Capital over the past 3 years of 20.81%. This 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 70.00% of its industry peers.
- In the last couple of years the Profit Margin of WSO has grown nicely.
- Looking at the Operating Margin, with a value of 9.80%, WSO is in the better half of the industry, outperforming 70.00% of the companies in the same industry.
- WSO's Operating Margin has improved in the last couple of years.
- WSO has a Gross Margin (27.92%) which is comparable to the rest of the 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
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so WSO is creating value.
- WSO has more shares outstanding than it did 1 year ago.
- Compared to 5 years ago, WSO has more shares outstanding
- Compared to 1 year ago, WSO has an improved debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 8.39 indicates that WSO is not in any danger for bankruptcy at the moment.
- WSO's Altman-Z score of 8.39 is amongst the best of the industry. WSO outperforms 88.00% 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.
- With an excellent Debt to FCF ratio value of 0.02, WSO belongs to the best of the industry, outperforming 92.00% 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 has a Debt to Equity ratio of 0.00. This is amongst the best in the industry. WSO outperforms 86.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.02 | ||
| Altman-Z | 8.39 |
ROIC/WACC1.59
WACC9.76%
2.3 Liquidity
- WSO has a Current Ratio of 3.84. This indicates that WSO is financially healthy and has no problem in meeting its short term obligations.
- WSO's Current ratio of 3.84 is amongst the best of the industry. WSO outperforms 88.00% 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 has a Quick ratio of 1.86. This is in the better half of the industry: WSO outperforms 72.00% 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%.
- The Earnings Per Share has been growing by 15.67% on average over the past years. This is quite good.
- WSO shows a decrease in Revenue. In the last year, the revenue decreased by -0.71%.
- WSO shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.81% yearly.
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-3.47%
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
- The Price/Earnings ratio is 29.72, which means the current valuation is very expensive for WSO.
- The rest of the industry has a similar Price/Earnings ratio as WSO.
- WSO is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.33, which is the current average of the S&P500 Index.
- The Price/Forward Earnings ratio is 28.70, which means the current valuation is very expensive for WSO.
- WSO's Price/Forward Earnings ratio is in line with the industry average.
- The average S&P500 Price/Forward Earnings ratio is at 24.12. WSO is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.72 | ||
| Fwd PE | 28.7 |
4.2 Price Multiples
- WSO's Enterprise Value to EBITDA ratio is in line with the industry average.
- Based on the Price/Free Cash Flow ratio, WSO is valued a bit cheaper than 70.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.82 | ||
| EV/EBITDA | 18.86 |
4.3 Compensation for Growth
- The excellent profitability rating of WSO may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.9
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 1.35. WSO pays more dividend than 88.00% of the companies in the same industry.
- WSO's Dividend Yield is rather good when compared to the S&P500 average which is at 1.91.
| 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 paid a dividend for at least 10 years, which is 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
- WSO pays out 95.01% of its income as dividend. This is not a sustainable payout ratio.
- The dividend of WSO is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP95.01%
EPS Next 2Y0.01%
EPS Next 3Y2.86%
NYSE:WSO (1/15/2026, 12:13:00 PM)
380.385
+7.88 (+2.11%)
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 Change-0.17%
Ins Owners0.38%
Ins Owner Change0%
Market Cap15.43B
Revenue(TTM)7.41B
Net Income(TTM)485.36M
Analysts66
Price Target414.41 (8.94%)
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-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)-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 | 29.72 | ||
| Fwd PE | 28.7 | ||
| P/S | 2.08 | ||
| P/FCF | 29.82 | ||
| P/OCF | 28.12 | ||
| P/B | 5.48 | ||
| P/tB | 7.2 | ||
| EV/EBITDA | 18.86 |
EPS(TTM)12.8
EY3.37%
EPS(NY)13.25
Fwd EY3.48%
FCF(TTM)12.76
FCFY3.35%
OCF(TTM)13.53
OCFY3.56%
SpS182.8
BVpS69.4
TBVpS52.83
PEG (NY)N/A
PEG (5Y)1.9
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 | 8.39 |
F-Score6
WACC9.76%
ROIC/WACC1.59
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 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%.