WATSCO INC (WSO) Fundamental Analysis & Valuation
NYSE:WSO • US9426222009
374.09 USD
-5.36 (-1.41%)
At close: Mar 11, 2026
374.09 USD
0 (0%)
After Hours: 3/11/2026, 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.
We assign a fundamental rating of 7 out of 10 to WSO. WSO was compared to 46 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 is valied quite expensively at the moment, while it does show a decent growth rate. WSO also has an excellent dividend rating. With these ratings, WSO could be worth investigating further for dividend and quality investing!.
1. WSO Profitability Analysis
1.1 Basic Checks
- In the past year WSO was profitable.
- In the past year WSO had a positive cash flow from operations.
- WSO had positive earnings in each of the past 5 years.
- Each year in the past 5 years WSO had a positive operating cash flow.
1.2 Ratios
- WSO's Return On Assets of 10.47% is amongst the best of the industry. WSO outperforms 89.13% of its industry peers.
- WSO has a better Return On Equity (16.62%) than 76.09% of its industry peers.
- The Return On Invested Capital of WSO (14.88%) is better than 89.13% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for WSO is significantly above the industry average of 9.05%.
| Industry Rank | Sector 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%
1.3 Margins
- Looking at the Profit Margin, with a value of 6.39%, WSO is in the better half of the industry, outperforming 71.74% of the companies in the same industry.
- 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 76.09% of the companies in the same industry.
- 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.
- WSO's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector 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%
2. WSO Health Analysis
2.1 Basic Checks
- WSO has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- Compared to 1 year ago, WSO has more shares outstanding
- 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 8.84 indicates that WSO is not in any danger for bankruptcy at the moment.
- WSO has a Altman-Z score of 8.84. This is amongst the best in the industry. WSO outperforms 91.30% 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.
- The Debt to FCF ratio of WSO (0.02) is better than 93.48% of its industry peers.
- A Debt/Equity ratio of 0.00 indicates that WSO is not too dependend on debt financing.
- With an excellent Debt to Equity ratio value of 0.00, WSO belongs to the best of the industry, outperforming 82.61% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.02 | ||
| Altman-Z | 8.84 |
ROIC/WACC1.49
WACC10.01%
2.3 Liquidity
- A Current Ratio of 4.12 indicates that WSO has no problem at all paying its short term obligations.
- WSO's Current ratio of 4.12 is amongst the best of the industry. WSO outperforms 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.
- With an excellent Quick ratio value of 2.18, WSO belongs to the best of the industry, outperforming 84.78% 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
- 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.
- The Revenue has decreased by -4.98% in the past 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
- Based on estimates for the next years, WSO will show a quite strong growth in Earnings Per Share. The EPS will grow by 19.57% on average per year.
- 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.
- The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. WSO Valuation Analysis
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 30.89 indicates a quite expensive valuation of WSO.
- Compared to the rest of the industry, the Price/Earnings ratio of WSO is on the same level as its industry peers.
- Compared to an average S&P500 Price/Earnings ratio of 26.15, WSO is valued at the same level.
- With a Price/Forward Earnings ratio of 29.26, WSO can be considered very expensive at the moment.
- The rest of the industry has a similar Price/Forward Earnings ratio as WSO.
- WSO is valuated rather expensively when we compare the Price/Forward Earnings ratio to 24.27, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.89 | ||
| Fwd PE | 29.26 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, WSO is valued a bit more expensive than the industry average as 63.04% of the companies are valued more cheaply.
- 65.22% 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 | 28.37 | ||
| EV/EBITDA | 19.52 |
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.
- The excellent profitability rating of WSO may justify a higher PE ratio.
PEG (NY)5.57
PEG (5Y)2.58
EPS Next 2Y7.49%
EPS Next 3Y10.94%
5. WSO Dividend Analysis
5.1 Amount
- WSO has a Yearly Dividend Yield of 3.19%. Purely for dividend investing, there may be better candidates out there.
- 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 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 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)11.59%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
- 102.49% of the earnings are spent on dividend by WSO. This is not a sustainable payout ratio.
- The dividend of WSO is growing, but earnings are growing more, so the dividend growth is sustainable.
DP102.49%
EPS Next 2Y7.49%
EPS Next 3Y10.94%
WSO Fundamentals: All Metrics, Ratios and Statistics
374.09
-5.36 (-1.41%)
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 Change4.57%
Ins Owners0.38%
Ins Owner Change0%
Market Cap15.18B
Revenue(TTM)7.24B
Net Income(TTM)462.26M
Analysts66
Price Target421.36 (12.64%)
Short Float %10.11%
Short Ratio8.61
Dividend
| Industry Rank | Sector 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 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)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 Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.89 | ||
| Fwd PE | 29.26 | ||
| P/S | 2.1 | ||
| P/FCF | 28.37 | ||
| P/OCF | 26.65 | ||
| P/B | 5.46 | ||
| P/tB | 7.2 | ||
| EV/EBITDA | 19.52 |
EPS(TTM)12.11
EY3.24%
EPS(NY)12.79
Fwd EY3.42%
FCF(TTM)13.19
FCFY3.52%
OCF(TTM)14.04
OCFY3.75%
SpS178.4
BVpS68.54
TBVpS51.96
PEG (NY)5.57
PEG (5Y)2.58
Graham Number136.66
Profitability
| Industry Rank | Sector 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 Rank | Sector 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 | 8.84 |
F-Score6
WACC10.01%
ROIC/WACC1.49
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 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%.