WATSCO INC (WSO) Stock Fundamental Analysis
NYSE:WSO • US9426222009
409.93 USD
+0.37 (+0.09%)
At close: Feb 20, 2026
409.93 USD
0 (0%)
After Hours: 2/20/2026, 8:10:46 PM
WSO gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 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 does not seem to be growing, but still is valued expensively. 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.
- WSO had a positive operating cash flow in the past year.
- 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 10.40% is amongst the best of the industry. WSO outperforms 84.00% of its industry peers.
- WSO has a Return On Equity of 16.50%. This is in the better half of the industry: WSO outperforms 72.00% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 14.88%, WSO belongs to the top of the industry, outperforming 90.00% of the companies in the same industry.
- WSO had an Average Return On Invested Capital over the past 3 years of 17.40%. This is significantly above the industry average of 9.46%.
| 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 70.00% of the companies in the same industry.
- In the last couple of years the Profit Margin of WSO has grown nicely.
- The Operating Margin of WSO (9.57%) is better than 70.00% of its industry peers.
- In the last couple of years the Operating Margin of WSO has grown nicely.
- With a Gross Margin value of 28.05%, WSO perfoms like the industry average, outperforming 46.00% 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) | 6.34% | ||
| 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
- 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/WACC1.54
WACC9.65%
2.3 Liquidity
- A Current Ratio of 4.12 indicates that WSO has no problem at all paying its short term obligations.
- WSO has a better Current ratio (4.12) than 88.00% 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.
- The Quick ratio of WSO (2.18) is better than 80.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.12 | ||
| Quick Ratio | 2.18 |
3. Growth
3.1 Past
- The earnings per share for WSO have decreased by -8.57% in the last year.
- The Earnings Per Share has been growing by 11.98% on average over the past years. This is quite good.
- 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 14.30% yearly.
- 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.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 33.85, the valuation of WSO can be described as expensive.
- 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 (26.99), we can say WSO is valued slightly more expensively.
- The Price/Forward Earnings ratio is 31.19, which means the current valuation is very expensive for WSO.
- The rest of the industry has a similar Price/Forward Earnings ratio as WSO.
- WSO is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 28.02, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.85 | ||
| Fwd PE | 31.19 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WSO indicates a slightly more expensive valuation: WSO is more expensive than 64.00% of the companies listed in the same industry.
- Based on the Price/Free Cash Flow ratio, WSO is valued a bit cheaper than 68.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.05 | ||
| EV/EBITDA | 21.18 |
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)3.99
PEG (5Y)2.83
EPS Next 2Y8.37%
EPS Next 3Y12.88%
5. Dividend
5.1 Amount
- WSO has a Yearly Dividend Yield of 3.19%.
- Compared to an average industry Dividend Yield of 1.11, WSO pays a better dividend. On top of this WSO pays more dividend than 90.00% 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 1.81.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.19% |
5.2 History
- On average, the dividend of WSO grows each year by 12.64%, which is quite nice.
- 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)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%
409.93
+0.37 (+0.09%)
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 Cap16.63B
Revenue(TTM)7.24B
Net Income(TTM)458.95M
Analysts66
Price Target404.02 (-1.44%)
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 | 33.85 | ||
| Fwd PE | 31.19 | ||
| P/S | 2.3 | ||
| P/FCF | 31.05 | ||
| P/OCF | 29.19 | ||
| P/B | 5.98 | ||
| P/tB | 8.71 | ||
| EV/EBITDA | 21.18 |
EPS(TTM)12.11
EY2.95%
EPS(NY)13.14
Fwd EY3.21%
FCF(TTM)13.2
FCFY3.22%
OCF(TTM)14.04
OCFY3.43%
SpS178.48
BVpS68.57
TBVpS47.08
PEG (NY)3.99
PEG (5Y)2.83
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
WACC9.65%
ROIC/WACC1.54
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 Year11.47%
EBIT Next 3Y20.62%
EBIT Next 5Y20.44%
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%.