WATSCO INC (WSO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:WSO - US9426222009 - Common Stock
336.95 USD
-6.1 (-1.78%)
336.95 USD
0 (0%)
Taking everything into account, WSO scores 7 out of 10 in our fundamental rating. WSO was compared to 50 industry peers in the Trading Companies & Distributors industry. WSO gets an excellent profitability rating and is at the same time showing great financial health properties. WSO is quite expensive at the moment. It does show a decent growth rate. Finally WSO also has an excellent dividend rating. These ratings would make WSO suitable for dividend and quality investing!
1. Profitability
1.1 Basic Checks
In the past year WSO was profitable.
WSO had a positive operating cash flow in the past year.
Each year in the past 5 years WSO has been profitable.
In the past 5 years WSO always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of WSO (10.66%) is better than 84.00% of its industry peers.
Looking at the Return On Equity, with a value of 17.24%, WSO is in the better half of the industry, outperforming 72.00% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 15.48%, WSO belongs to the top of the industry, outperforming 92.00% of the companies in the same industry.
WSO had an Average Return On Invested Capital over the past 3 years of 20.81%. This is significantly above the industry average of 9.63%.
The 3 year average ROIC (20.81%) for WSO is well above the current ROIC(15.48%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.66% | ||
| ROE | 17.24% | ||
| ROIC | 15.48% |
ROA(3y)13.43%
ROA(5y)12.52%
ROE(3y)23.42%
ROE(5y)21.95%
ROIC(3y)20.81%
ROIC(5y)19.72%
1.3 Margins
WSO's Profit Margin of 6.55% is fine compared to the rest of the industry. WSO outperforms 70.00% 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 9.80%, WSO is in the better half of the industry, outperforming 70.00% 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 27.92%, WSO is in line with its industry, 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 | 9.8% | ||
| PM (TTM) | 6.55% | ||
| GM | 27.92% |
OM growth 3Y0.55%
OM growth 5Y5.7%
PM growth 3Y2.52%
PM growth 5Y6.74%
GM growth 3Y0.36%
GM growth 5Y2.05%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), WSO is creating value.
WSO has more shares outstanding than it did 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 an Altman-Z score of 7.98. This indicates that WSO is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of WSO (7.98) is better than 88.00% 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.
With an excellent Debt to FCF ratio value of 0.02, WSO belongs to the best of the industry, outperforming 92.00% of the companies in the same industry.
A Debt/Equity ratio of 0.00 indicates that WSO is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.00, WSO belongs to the top of the industry, outperforming 86.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.02 | ||
| Altman-Z | 7.98 |
ROIC/WACC1.59
WACC9.75%
2.3 Liquidity
WSO has a Current Ratio of 3.84. This indicates that WSO is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of WSO (3.84) is better than 88.00% of its industry peers.
A Quick Ratio of 1.86 indicates that WSO should not have too much problems paying its short term obligations.
WSO has a Quick ratio of 1.86. This is in the better half of the industry: WSO outperforms 72.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.84 | ||
| Quick Ratio | 1.86 |
3. Growth
3.1 Past
WSO shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -1.05%.
WSO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.67% yearly.
WSO shows a decrease in Revenue. In the last year, the revenue decreased by -0.71%.
The Revenue has been growing by 9.81% on average over the past years. This is quite good.
EPS 1Y (TTM)-1.05%
EPS 3Y7.25%
EPS 5Y15.67%
EPS Q2Q%-5.69%
Revenue 1Y (TTM)-0.71%
Revenue growth 3Y6.65%
Revenue growth 5Y9.81%
Sales Q2Q%-4.31%
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 11.57% on average per year.
Based on estimates for the next years, WSO will show a quite strong growth in Revenue. The Revenue will grow by 8.19% on average per year.
EPS Next Y-6.04%
EPS Next 2Y0.01%
EPS Next 3Y2.86%
EPS Next 5Y11.57%
Revenue Next Year-3.47%
Revenue Next 2Y0.07%
Revenue Next 3Y1.8%
Revenue Next 5Y8.19%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past 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.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 26.32, WSO can be considered very expensive at the moment.
The rest of the industry has a similar Price/Earnings ratio as WSO.
WSO's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.51.
The Price/Forward Earnings ratio is 25.43, which means the current valuation is very expensive for WSO.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WSO is on the same level as its industry peers.
WSO's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 23.13.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.32 | ||
| Fwd PE | 25.43 |
4.2 Price Multiples
WSO's Enterprise Value to EBITDA ratio is in line with the industry average.
66.00% 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 | 26.41 | ||
| EV/EBITDA | 17.31 |
4.3 Compensation for Growth
The excellent profitability rating of WSO may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.68
EPS Next 2Y0.01%
EPS Next 3Y2.86%
5. Dividend
5.1 Amount
WSO has a Yearly Dividend Yield of 3.26%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 0.98, WSO pays a better dividend. On top of this WSO pays more dividend than 90.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.00, WSO pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.26% |
5.2 History
The dividend of WSO is nicely growing with an annual growth rate of 11.05%!
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)11.05%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
95.01% 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.
DP95.01%
EPS Next 2Y0.01%
EPS Next 3Y2.86%
336.95
-6.1 (-1.78%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners112.32%
Inst Owner Change3.13%
Ins Owners0.38%
Ins Owner Change0%
Market Cap13.67B
Revenue(TTM)7.41B
Net Income(TTM)485.36M
Analysts66
Price Target414.41 (22.99%)
Short Float %9.26%
Short Ratio7.25
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.26% |
Yearly Dividend9.55
Dividend Growth(5Y)11.05%
DP95.01%
Div Incr Years11
Div Non Decr Years11
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-6.38%
Min EPS beat(2)-6.66%
Max EPS beat(2)-6.09%
EPS beat(4)1
Avg EPS beat(4)-4.57%
Min EPS beat(4)-15.33%
Max EPS beat(4)9.8%
EPS beat(8)1
Avg EPS beat(8)-7.02%
EPS beat(12)4
Avg EPS beat(12)1.45%
EPS beat(16)6
Avg EPS beat(16)5.32%
Revenue beat(2)0
Avg Revenue beat(2)-6.6%
Min Revenue beat(2)-8.58%
Max Revenue beat(2)-4.61%
Revenue beat(4)1
Avg Revenue beat(4)-4.31%
Min Revenue beat(4)-8.58%
Max Revenue beat(4)4.34%
Revenue beat(8)1
Avg Revenue beat(8)-3.93%
Revenue beat(12)2
Avg Revenue beat(12)-3.5%
Revenue beat(16)4
Avg Revenue beat(16)-1.61%
PT rev (1m)-0.75%
PT rev (3m)-13.44%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-24.36%
EPS NY rev (1m)-2.25%
EPS NY rev (3m)-9.45%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-8.23%
Revenue NY rev (1m)-1.06%
Revenue NY rev (3m)-4.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.32 | ||
| Fwd PE | 25.43 | ||
| P/S | 1.84 | ||
| P/FCF | 26.41 | ||
| P/OCF | 24.91 | ||
| P/B | 4.86 | ||
| P/tB | 6.38 | ||
| EV/EBITDA | 17.31 |
EPS(TTM)12.8
EY3.8%
EPS(NY)13.25
Fwd EY3.93%
FCF(TTM)12.76
FCFY3.79%
OCF(TTM)13.53
OCFY4.02%
SpS182.8
BVpS69.4
TBVpS52.83
PEG (NY)N/A
PEG (5Y)1.68
Graham Number141.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.66% | ||
| ROE | 17.24% | ||
| ROCE | 19.41% | ||
| ROIC | 15.48% | ||
| ROICexc | 18% | ||
| ROICexgc | 22.75% | ||
| OM | 9.8% | ||
| PM (TTM) | 6.55% | ||
| GM | 27.92% | ||
| FCFM | 6.98% |
ROA(3y)13.43%
ROA(5y)12.52%
ROE(3y)23.42%
ROE(5y)21.95%
ROIC(3y)20.81%
ROIC(5y)19.72%
ROICexc(3y)23.47%
ROICexc(5y)21.78%
ROICexgc(3y)31.07%
ROICexgc(5y)29.54%
ROCE(3y)26.1%
ROCE(5y)24.73%
ROICexgc growth 3Y-0.91%
ROICexgc growth 5Y8.07%
ROICexc growth 3Y0.61%
ROICexc growth 5Y9.42%
OM growth 3Y0.55%
OM growth 5Y5.7%
PM growth 3Y2.52%
PM growth 5Y6.74%
GM growth 3Y0.36%
GM growth 5Y2.05%
F-Score6
Asset Turnover1.63
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.02 | ||
| Debt/EBITDA | 0.02 | ||
| Cap/Depr | 72.48% | ||
| Cap/Sales | 0.42% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 71.31% | ||
| Profit Quality | 106.61% | ||
| Current Ratio | 3.84 | ||
| Quick Ratio | 1.86 | ||
| Altman-Z | 7.98 |
F-Score6
WACC9.75%
ROIC/WACC1.59
Cap/Depr(3y)95.78%
Cap/Depr(5y)88.24%
Cap/Sales(3y)0.46%
Cap/Sales(5y)0.42%
Profit Quality(3y)117.3%
Profit Quality(5y)129.41%
High Growth Momentum
Growth
EPS 1Y (TTM)-1.05%
EPS 3Y7.25%
EPS 5Y15.67%
EPS Q2Q%-5.69%
EPS Next Y-6.04%
EPS Next 2Y0.01%
EPS Next 3Y2.86%
EPS Next 5Y11.57%
Revenue 1Y (TTM)-0.71%
Revenue growth 3Y6.65%
Revenue growth 5Y9.81%
Sales Q2Q%-4.31%
Revenue Next Year-3.47%
Revenue Next 2Y0.07%
Revenue Next 3Y1.8%
Revenue Next 5Y8.19%
EBIT growth 1Y0.38%
EBIT growth 3Y7.24%
EBIT growth 5Y16.07%
EBIT Next Year-0.31%
EBIT Next 3Y5.43%
EBIT Next 5Y10.74%
FCF growth 1Y17.12%
FCF growth 3Y31.86%
FCF growth 5Y18.5%
OCF growth 1Y15.18%
OCF growth 3Y30.29%
OCF growth 5Y18.15%
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 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 95.01%.