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.
Taking everything into account, WSO scores 6 out of 10 in our fundamental rating. WSO was compared to 47 industry peers in the Trading Companies & Distributors industry. WSO scores excellent points on both the profitability and health parts. This is a solid base for a good stock. WSO has a expensive valuation and it also scores bad on growth. Finally 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.
- In the past year WSO had a positive cash flow from operations.
- Each year in the past 5 years WSO has been profitable.
- Each year in the past 5 years WSO had a positive operating cash flow.
1.2 Ratios
- With an excellent Return On Assets value of 10.40%, WSO belongs to the best of the industry, outperforming 89.36% of the companies in the same industry.
- WSO has a Return On Equity of 16.50%. This is in the better half of the industry: WSO outperforms 76.60% of its industry peers.
- With an excellent Return On Invested Capital value of 14.88%, WSO belongs to the best of the industry, outperforming 89.36% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for WSO 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
- WSO's Profit Margin of 6.34% is fine compared to the rest of the industry. WSO outperforms 72.34% 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 9.57%, WSO is in the better half of the industry, outperforming 74.47% of the companies in the same industry.
- In the last couple of years the Operating Margin of WSO has grown nicely.
- Looking at the Gross Margin, with a value of 28.05%, WSO is in line with its industry, outperforming 48.94% 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 | 9.57% | ||
| 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
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), WSO is creating some 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.
- The debt/assets ratio for WSO has been reduced compared to a year ago.
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/WACC1.53
WACC9.74%
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.
- Looking at the Current ratio, with a value of 4.12, WSO belongs to the top 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.
- Looking at the Quick ratio, with a value of 2.18, WSO belongs to the top of the industry, outperforming 85.11% of the companies in the same industry.
| 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%.
- The Earnings Per Share has been growing by 11.98% on average over the past years. This is quite good.
- WSO shows a decrease in Revenue. In the last year, the revenue decreased by -4.98%.
- The Revenue has been growing slightly by 7.45% on average over the past years.
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
- Based on estimates for the next years, WSO will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.30% on average per year.
- WSO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.55% yearly.
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
- WSO is valuated quite expensively with a Price/Earnings ratio of 32.47.
- 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.
- With a Price/Forward Earnings ratio of 29.92, WSO can be considered very expensive at the moment.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of WSO is on the same level as its industry peers.
- The average S&P500 Price/Forward Earnings ratio is at 24.57. WSO is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.47 | ||
| Fwd PE | 29.92 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, WSO is valued a bit more expensive than the industry average as 63.83% of the companies are valued more cheaply.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of WSO indicates a somewhat cheap valuation: WSO is cheaper than 63.83% of the companies listed in the same industry.
| 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 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)3.83
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.
- Compared to an average industry Dividend Yield of 1.02, WSO pays a better dividend. On top of this WSO pays more dividend than 91.49% of the companies listed in the same industry.
- WSO's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.19% |
5.2 History
- The dividend of WSO is nicely growing with an annual growth rate of 11.59%!
- 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)11.59%
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.
- The dividend of WSO is growing, but earnings are growing more, so 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 Owners110.99%
Inst Owner Change4.55%
Ins Owners0.38%
Ins Owner Change0%
Market Cap15.96B
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 Dividend10.64
Dividend Growth(5Y)11.59%
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
WACC9.74%
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%.