WATSCO INC (WSO) Stock Fundamental Analysis
NYSE:WSO • US9426222009
417.33 USD
+6.64 (+1.62%)
At close: Feb 27, 2026
417.33 USD
0 (0%)
After Hours: 2/27/2026, 8:04:00 PM
We assign a fundamental rating of 6 out of 10 to WSO. WSO was compared to 50 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 has a expensive valuation and it also scores bad on growth. WSO also has an excellent dividend rating. These ratings could make WSO a good candidate for dividend investing.
1. Profitability
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.
- WSO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- With an excellent Return On Assets value of 10.40%, WSO belongs to the best of the industry, outperforming 84.00% of the companies in the same industry.
- With a decent Return On Equity value of 16.50%, WSO is doing good in the industry, outperforming 72.00% of the companies in the same industry.
- WSO's Return On Invested Capital of 14.88% is amongst the best of the industry. WSO outperforms 90.00% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for WSO is significantly above the industry average of 9.42%.
| 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 70.00% of its industry peers.
- WSO's Profit Margin has improved in the last couple of years.
- Looking at the Operating Margin, with a value of 9.57%, 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 of 28.05%. This is comparable to the rest of the industry: WSO outperforms 46.00% 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) | 6.34% | ||
| 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. Health
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 less shares outstanding
- WSO has less shares outstanding than it did 5 years ago.
- WSO has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
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/WACC1.57
WACC9.5%
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.
- With an excellent Current ratio value of 4.12, WSO belongs to the best of the industry, outperforming 88.00% of the companies in the same industry.
- 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.
- WSO has a Quick ratio of 2.18. This is in the better half of the industry: WSO outperforms 80.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.12 | ||
| Quick Ratio | 2.18 |
3. Growth
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.
- The Revenue has decreased by -4.98% in the past year.
- WSO shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.45% yearly.
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.
- Based on estimates for the next years, WSO will show a small growth in Revenue. The Revenue will grow by 5.55% on average per year.
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
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
- 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
- A Price/Earnings ratio of 34.46 indicates a quite expensive valuation of WSO.
- WSO's Price/Earnings is on the same level as the industry average.
- The average S&P500 Price/Earnings ratio is at 27.10. WSO is valued slightly more expensive when compared to this.
- With a Price/Forward Earnings ratio of 31.76, WSO can be considered very expensive at the moment.
- WSO's Price/Forward Earnings is on the same level as the industry average.
- The average S&P500 Price/Forward Earnings ratio is at 28.06. WSO is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.46 | ||
| Fwd PE | 31.76 |
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 64.00% of the companies in the same industry.
- WSO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. WSO is cheaper than 70.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.61 | ||
| EV/EBITDA | 21.22 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The excellent profitability rating of WSO 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)4.06
PEG (5Y)2.88
EPS Next 2Y8.37%
EPS Next 3Y12.88%
5. Dividend
5.1 Amount
- WSO has a Yearly Dividend Yield of 3.19%.
- WSO's Dividend Yield is rather good when compared to the industry average which is at 1.26. 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 1.80.
| 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 paid a dividend for at least 10 years, which is a reliable track record.
- WSO has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)12.64%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
- 103.23% of the earnings are spent on dividend by WSO. 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%
417.33
+6.64 (+1.62%)
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 Change4.52%
Ins Owners0.38%
Ins Owner Change0%
Market Cap16.93B
Revenue(TTM)7.24B
Net Income(TTM)458.95M
Analysts66
Price Target421.36 (0.97%)
Short Float %9.97%
Short Ratio8.02
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)-1.12%
PT rev (3m)-3.24%
EPS NQ rev (1m)-0.24%
EPS NQ rev (3m)-0.98%
EPS NY rev (1m)0%
EPS NY rev (3m)-2.22%
Revenue NQ rev (1m)-0.12%
Revenue NQ rev (3m)-0.67%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)-1.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.46 | ||
| Fwd PE | 31.76 | ||
| P/S | 2.34 | ||
| P/FCF | 31.61 | ||
| P/OCF | 29.72 | ||
| P/B | 6.09 | ||
| P/tB | 8.86 | ||
| EV/EBITDA | 21.22 |
EPS(TTM)12.11
EY2.9%
EPS(NY)13.14
Fwd EY3.15%
FCF(TTM)13.2
FCFY3.16%
OCF(TTM)14.04
OCFY3.37%
SpS178.48
BVpS68.57
TBVpS47.08
PEG (NY)4.06
PEG (5Y)2.88
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
WACC9.5%
ROIC/WACC1.57
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%.