WATSCO INC (WSO) Fundamental Analysis & Valuation

NYSE:WSO • US9426222009

Current stock price

368.39 USD
+4.6 (+1.26%)
At close:
368.39 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.

8

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.
  • In the past 5 years WSO has always been profitable.
  • WSO had a positive operating cash flow in each of the past 5 years.
WSO Yearly Net Income VS EBIT VS OCF VS FCFWSO Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 200M 400M 600M 800M

1.2 Ratios

  • WSO has a Return On Assets of 10.47%. This is amongst the best in the industry. WSO outperforms 89.13% of its industry peers.
  • With a decent Return On Equity value of 16.62%, WSO is doing good in the industry, outperforming 76.09% of the companies in the same industry.
  • With an excellent Return On Invested Capital value of 14.88%, WSO belongs to the best of the industry, outperforming 89.13% of the companies in the same industry.
  • Measured over the past 3 years, the Average Return On Invested Capital for WSO is significantly above the industry average of 9.03%.
Industry RankSector 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%
WSO Yearly ROA, ROE, ROICWSO Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 5 10 15 20 25

1.3 Margins

  • WSO's Profit Margin of 6.39% is fine compared to the rest of the industry. WSO outperforms 71.74% of its industry peers.
  • WSO's Profit Margin has improved in the last couple of years.
  • WSO's Operating Margin of 9.57% is fine compared to the rest of the industry. WSO outperforms 76.09% of its industry peers.
  • WSO's Operating Margin has improved in the last couple of years.
  • Looking at the Gross Margin, with a value of 28.05%, WSO is in line with its industry, outperforming 47.83% of the companies in the same industry.
  • In the last couple of years the Gross Margin of WSO has grown nicely.
Industry RankSector 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%
WSO Yearly Profit, Operating, Gross MarginsWSO Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 5 10 15 20 25

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9

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.
  • Compared to 1 year ago, WSO has more shares outstanding
  • Compared to 5 years ago, WSO has more shares outstanding
  • WSO has a better debt/assets ratio than last year.
WSO Yearly Shares OutstandingWSO Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10M 20M 30M 40M
WSO Yearly Total Debt VS Total AssetsWSO Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1B 2B 3B 4B

2.2 Solvency

  • An Altman-Z score of 8.61 indicates that WSO is not in any danger for bankruptcy at the moment.
  • Looking at the Altman-Z score, with a value of 8.61, WSO belongs to the top of the industry, outperforming 91.30% of the companies in the same industry.
  • The Debt to FCF ratio of WSO is 0.02, which is an excellent value as it means it would take WSO, only 0.02 years of fcf income to pay off all of its debts.
  • Looking at the Debt to FCF ratio, with a value of 0.02, WSO belongs to the top of the industry, outperforming 93.48% 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.
  • Looking at the Debt to Equity ratio, with a value of 0.00, WSO belongs to the top of the industry, outperforming 82.61% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0
Debt/FCF 0.02
Altman-Z 8.61
ROIC/WACC1.47
WACC10.09%
WSO Yearly LT Debt VS Equity VS FCFWSO Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 500M 1B 1.5B 2B 2.5B

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.
  • The Current ratio of WSO (4.12) is better than 93.48% of its industry peers.
  • WSO has a Quick Ratio of 2.18. This indicates that WSO is financially healthy and has no problem in meeting its short term obligations.
  • Looking at the Quick ratio, with a value of 2.18, WSO belongs to the top of the industry, outperforming 84.78% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 4.12
Quick Ratio 2.18
WSO Yearly Current Assets VS Current LiabilitesWSO Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1B 2B 3B

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5

3. WSO Growth Analysis

3.1 Past

  • The earnings per share for WSO have decreased by -8.57% in the last year.
  • 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.
  • 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

  • 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.
  • The Revenue is expected to grow by 8.44% on average over the next years. This is quite good.
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.
WSO Yearly Revenue VS EstimatesWSO Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2B 4B 6B 8B 10B
WSO Yearly EPS VS EstimatesWSO Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 5 10 15 20 25

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3

4. WSO Valuation Analysis

4.1 Price/Earnings Ratio

  • Based on the Price/Earnings ratio of 30.42, the valuation of WSO can be described as expensive.
  • WSO's Price/Earnings ratio is in line with the industry average.
  • WSO's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 25.70.
  • WSO is valuated quite expensively with a Price/Forward Earnings ratio of 28.81.
  • The rest of the industry has a similar Price/Forward Earnings ratio as WSO.
  • When comparing the Price/Forward Earnings ratio of WSO to the average of the S&P500 Index (23.84), we can say WSO is valued slightly more expensively.
Industry RankSector Rank
PE 30.42
Fwd PE 28.81
WSO Price Earnings VS Forward Price EarningsWSO Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

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 63.04% 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 65.22% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 27.94
EV/EBITDA 18.66
WSO Per share dataWSO EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 50 100 150

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.
PEG (NY)5.49
PEG (5Y)2.54
EPS Next 2Y7.49%
EPS Next 3Y10.94%

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7

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 1.04. WSO pays more dividend than 91.30% of the companies in the same industry.
  • WSO's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
Industry RankSector 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 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
WSO Yearly Dividends per shareWSO Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2 4 6 8 10

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 Yearly Income VS Free CF VS DividendWSO Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 200M 400M 600M
WSO Dividend Payout.WSO Dividend Payout, showing the Payout Ratio.WSO Dividend Payout.PayoutRetained Earnings

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WSO Fundamentals: All Metrics, Ratios and Statistics

WATSCO INC

NYSE:WSO (3/13/2026, 8:04:00 PM)

After market: 368.39 0 (0%)

368.39

+4.6 (+1.26%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)02-17
Earnings (Next)04-21
Inst Owners110.99%
Inst Owner Change4.57%
Ins Owners0.38%
Ins Owner Change0%
Market Cap14.95B
Revenue(TTM)7.24B
Net Income(TTM)462.26M
Analysts66
Price Target421.36 (14.38%)
Short Float %10.11%
Short Ratio8.61
Dividend
Industry RankSector 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
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 RankSector Rank
PE 30.42
Fwd PE 28.81
P/S 2.07
P/FCF 27.94
P/OCF 26.24
P/B 5.37
P/tB 7.09
EV/EBITDA 18.66
EPS(TTM)12.11
EY3.29%
EPS(NY)12.79
Fwd EY3.47%
FCF(TTM)13.19
FCFY3.58%
OCF(TTM)14.04
OCFY3.81%
SpS178.4
BVpS68.54
TBVpS51.96
PEG (NY)5.49
PEG (5Y)2.54
Graham Number136.66
Profitability
Industry RankSector 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 RankSector 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 8.61
F-Score6
WACC10.09%
ROIC/WACC1.47
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 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 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%.