WATSCO INC (WSO) Fundamental Analysis & Valuation
NYSE:WSO • US9426222009
393.19 USD
-7.68 (-1.92%)
At close: Mar 6, 2026
393.19 USD
0 (0%)
After Hours: 3/6/2026, 8:04:00 PM
This WSO fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.
Overall WSO gets a fundamental rating of 6 out of 10. We evaluated WSO against 47 industry peers in the Trading Companies & Distributors industry. WSO has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. WSO does not seem to be growing, but still is valued expensively. WSO also has an excellent dividend rating. This makes WSO very considerable for dividend investing!
1. WSO Profitability Analysis
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.
- WSO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- WSO has a Return On Assets of 10.40%. This is amongst the best in the industry. WSO outperforms 89.36% of its industry peers.
- Looking at the Return On Equity, with a value of 16.50%, WSO is in the better half of the industry, outperforming 76.60% of the companies in the same industry.
- WSO has a Return On Invested Capital of 14.88%. This is amongst the best in 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 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
- With a decent Profit Margin value of 6.34%, WSO is doing good in the industry, outperforming 72.34% of the companies in the same industry.
- In the last couple of years the Profit Margin of WSO has grown nicely.
- WSO's Operating Margin of 9.57% is fine compared to the rest of the industry. WSO outperforms 74.47% of its industry peers.
- WSO's Operating Margin has improved in the last couple of years.
- WSO has a Gross Margin (28.05%) which is in line with 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. 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.
- WSO has less shares outstanding than it did 1 year ago.
- 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.
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 Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | N/A |
ROIC/WACC1.53
WACC9.72%
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.
- 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
- The earnings per share for WSO have decreased by -8.57% in the last year.
- Measured over the past years, WSO shows a quite strong growth in Earnings Per Share. The EPS has been growing by 11.98% on average per year.
- 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
- 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
- The EPS growth rate is stable: in the next years the growth will be about the same 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. WSO Valuation Analysis
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 32.47, WSO can be considered very expensive at the moment.
- WSO's Price/Earnings ratio is in line with the industry average.
- When comparing the Price/Earnings ratio of WSO to the average of the S&P500 Index (26.29), we can say WSO is valued slightly more expensively.
- WSO is valuated quite expensively with a Price/Forward Earnings ratio of 29.92.
- WSO's Price/Forward Earnings ratio is in line with the industry average.
- WSO's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 24.57.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.47 | ||
| Fwd PE | 29.92 |
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.
- 63.83% 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 | 29.78 | ||
| EV/EBITDA | 20.68 |
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.
- A more expensive valuation may be justified as WSO's earnings are expected to grow with 12.88% in the coming years.
PEG (NY)3.83
PEG (5Y)2.71
EPS Next 2Y8.37%
EPS Next 3Y12.88%
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 1.00. WSO pays more dividend than 91.49% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, 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%
WSO Fundamentals: All Metrics, Ratios and Statistics
393.19
-7.68 (-1.92%)
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 Change4.55%
Ins Owners0.38%
Ins Owner Change0%
Market Cap15.95B
Revenue(TTM)7.24B
Net Income(TTM)458.95M
Analysts66
Price Target421.36 (7.16%)
Short Float %10.11%
Short Ratio8.61
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)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 Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.47 | ||
| Fwd PE | 29.92 | ||
| P/S | 2.2 | ||
| P/FCF | 29.78 | ||
| P/OCF | 28 | ||
| P/B | 5.73 | ||
| P/tB | 8.35 | ||
| EV/EBITDA | 20.68 |
EPS(TTM)12.11
EY3.08%
EPS(NY)13.14
Fwd EY3.34%
FCF(TTM)13.2
FCFY3.36%
OCF(TTM)14.04
OCFY3.57%
SpS178.48
BVpS68.57
TBVpS47.08
PEG (NY)3.83
PEG (5Y)2.71
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
WACC9.72%
ROIC/WACC1.53
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%.