WATSCO INC (WSO)
US9426222009 - Common Stock
WSO gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 48 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.
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.
In the past 5 years WSO has always been profitable.
In the past 5 years WSO always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 10.73%, WSO belongs to the best of the industry, outperforming 87.50% of the companies in the same industry.
WSO has a Return On Equity of 17.99%. This is in the better half of the industry: WSO outperforms 62.50% of its industry peers.
With an excellent Return On Invested Capital value of 16.67%, WSO belongs to the best of the industry, outperforming 91.67% of the companies in the same industry.
WSO had an Average Return On Invested Capital over the past 3 years of 22.74%. This is significantly above the industry average of 9.72%.
The 3 year average ROIC (22.74%) for WSO is well above the current ROIC(16.67%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.73% | ||
| ROE | 17.99% | ||
| ROIC | 16.67% |
ROA(3y)13.84%
ROA(5y)12.05%
ROE(3y)24.81%
ROE(5y)21.34%
ROIC(3y)22.74%
ROIC(5y)19.68%
1.3 Margins
WSO has a Profit Margin of 6.49%. This is in the better half of the industry: WSO outperforms 66.67% of its industry peers.
In the last couple of years the Profit Margin of WSO has grown nicely.
With a decent Operating Margin value of 9.69%, WSO is doing good in the industry, outperforming 62.50% of the companies in the same industry.
WSO's Operating Margin has improved in the last couple of years.
WSO has a worse Gross Margin (26.66%) than 62.50% of its industry peers.
WSO's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.69% | ||
| PM (TTM) | 6.49% | ||
| GM | 26.66% |
OM growth 3Y11.03%
OM growth 5Y5.75%
PM growth 3Y12.04%
PM growth 5Y6.92%
GM growth 3Y4.18%
GM growth 5Y2.11%
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.
Compared to 5 years ago, WSO has more shares outstanding
WSO has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 10.50 indicates that WSO is not in any danger for bankruptcy at the moment.
WSO has a better Altman-Z score (10.50) than 93.75% of its industry peers.
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.
The Debt to FCF ratio of WSO (0.02) is better than 93.75% of its industry peers.
A Debt/Equity ratio of 0.01 indicates that WSO is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.01, WSO belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.02 | ||
| Altman-Z | 10.5 |
ROIC/WACC1.45
WACC11.52%
2.3 Liquidity
WSO has a Current Ratio of 3.36. This indicates that WSO is financially healthy and has no problem in meeting its short term obligations.
WSO has a better Current ratio (3.36) than 85.42% of its industry peers.
A Quick Ratio of 1.65 indicates that WSO should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.65, WSO is in the better half of the industry, outperforming 70.83% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.36 | ||
| Quick Ratio | 1.65 |
3. Growth
3.1 Past
WSO shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -14.59%.
WSO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 16.30% yearly.
Looking at the last year, WSO shows a small growth in Revenue. The Revenue has grown by 2.83% in the last year.
WSO shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.88% yearly.
EPS 1Y (TTM)-14.59%
EPS 3Y25.69%
EPS 5Y16.3%
EPS Q2Q%-2.99%
Revenue 1Y (TTM)2.83%
Revenue growth 3Y12.95%
Revenue growth 5Y9.88%
Sales Q2Q%1.56%
3.2 Future
The Earnings Per Share is expected to grow by 7.36% on average over the next years.
WSO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.59% yearly.
EPS Next Y-2.13%
EPS Next 2Y4.8%
EPS Next 3Y6.96%
EPS Next 5Y7.36%
Revenue Next Year2.78%
Revenue Next 2Y4.68%
Revenue Next 3Y5.27%
Revenue Next 5Y7.59%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less 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
With a Price/Earnings ratio of 37.71, WSO can be considered very expensive at the moment.
WSO's Price/Earnings ratio is a bit more expensive when compared to the industry. WSO is more expensive than 70.83% of the companies in the same industry.
When comparing the Price/Earnings ratio of WSO to the average of the S&P500 Index (27.29), we can say WSO is valued slightly more expensively.
Based on the Price/Forward Earnings ratio of 32.52, the valuation of WSO can be described as expensive.
WSO's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. WSO is more expensive than 68.75% of the companies in the same industry.
WSO's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 23.78.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.71 | ||
| Fwd PE | 32.52 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WSO is valued more expensive than 81.25% of the companies in the same industry.
60.42% 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 | 33.92 | ||
| EV/EBITDA | 28.24 |
4.3 Compensation for Growth
The excellent profitability rating of WSO may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.31
EPS Next 2Y4.8%
EPS Next 3Y6.96%
5. Dividend
5.1 Amount
WSO has a Yearly Dividend Yield of 2.22%. 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 1.86. WSO pays more dividend than 87.50% of the companies in the same industry.
WSO's Dividend Yield is comparable with the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.22% |
5.2 History
On average, the dividend of WSO grows each year by 11.93%, which is quite nice.
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)11.93%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
84.75% of the earnings are spent on dividend by WSO. This is not a sustainable payout ratio.
The dividend of WSO is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP84.75%
EPS Next 2Y4.8%
EPS Next 3Y6.96%
WATSCO INC
NYSE:WSO (12/23/2024, 4:45:04 PM)
After market: 487.94 0 (0%)487.94
+3.61 (+0.75%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners107.27%
Inst Owner Change-0.95%
Ins Owners0.63%
Ins Owner Change0%
Market Cap22.41B
Analysts68.42
Price Target499.3 (2.33%)
Short Float %7.13%
Short Ratio11.89
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.22% |
Dividend Growth(5Y)11.93%
DP84.75%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-8.4%
Min EPS beat(2)-11.69%
Max EPS beat(2)-5.12%
EPS beat(4)0
Avg EPS beat(4)-9.46%
Min EPS beat(4)-15.46%
Max EPS beat(4)-5.12%
EPS beat(8)3
Avg EPS beat(8)4.46%
EPS beat(12)5
Avg EPS beat(12)8.62%
EPS beat(16)9
Avg EPS beat(16)11.98%
Revenue beat(2)0
Avg Revenue beat(2)-3.83%
Min Revenue beat(2)-4.68%
Max Revenue beat(2)-2.98%
Revenue beat(4)0
Avg Revenue beat(4)-3.55%
Min Revenue beat(4)-4.68%
Max Revenue beat(4)-2.8%
Revenue beat(8)1
Avg Revenue beat(8)-3.09%
Revenue beat(12)3
Avg Revenue beat(12)-0.71%
Revenue beat(16)6
Avg Revenue beat(16)4.64%
PT rev (1m)0.62%
PT rev (3m)3.81%
EPS NQ rev (1m)-0.31%
EPS NQ rev (3m)-5.84%
EPS NY rev (1m)-0.06%
EPS NY rev (3m)-4.95%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)-1.64%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.39%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.71 | ||
| Fwd PE | 32.52 | ||
| P/S | 3 | ||
| P/FCF | 33.92 | ||
| P/OCF | 32.35 | ||
| P/B | 8.31 | ||
| P/tB | 11.06 | ||
| EV/EBITDA | 28.24 |
EPS(TTM)12.94
EY2.65%
EPS(NY)15
Fwd EY3.07%
FCF(TTM)14.39
FCFY2.95%
OCF(TTM)15.08
OCFY3.09%
SpS162.59
BVpS58.71
TBVpS44.11
PEG (NY)N/A
PEG (5Y)2.31
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.73% | ||
| ROE | 17.99% | ||
| ROCE | 20.19% | ||
| ROIC | 16.67% | ||
| ROICexc | 19.69% | ||
| ROICexgc | 25.28% | ||
| OM | 9.69% | ||
| PM (TTM) | 6.49% | ||
| GM | 26.66% | ||
| FCFM | 8.85% |
ROA(3y)13.84%
ROA(5y)12.05%
ROE(3y)24.81%
ROE(5y)21.34%
ROIC(3y)22.74%
ROIC(5y)19.68%
ROICexc(3y)24.16%
ROICexc(5y)20.89%
ROICexgc(3y)32.45%
ROICexgc(5y)28.64%
ROCE(3y)27.54%
ROCE(5y)23.83%
ROICexcg growth 3Y5.49%
ROICexcg growth 5Y3.25%
ROICexc growth 3Y9.16%
ROICexc growth 5Y5.36%
OM growth 3Y11.03%
OM growth 5Y5.75%
PM growth 3Y12.04%
PM growth 5Y6.92%
GM growth 3Y4.18%
GM growth 5Y2.11%
F-Score5
Asset Turnover1.65
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.02 | ||
| Debt/EBITDA | 0.02 | ||
| Cap/Depr | 80.06% | ||
| Cap/Sales | 0.43% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 90.72% | ||
| Profit Quality | 136.26% | ||
| Current Ratio | 3.36 | ||
| Quick Ratio | 1.65 | ||
| Altman-Z | 10.5 |
F-Score5
WACC11.52%
ROIC/WACC1.45
Cap/Depr(3y)101.39%
Cap/Depr(5y)88.03%
Cap/Sales(3y)0.46%
Cap/Sales(5y)0.42%
Profit Quality(3y)95.96%
Profit Quality(5y)127.83%
High Growth Momentum
Growth
EPS 1Y (TTM)-14.59%
EPS 3Y25.69%
EPS 5Y16.3%
EPS Q2Q%-2.99%
EPS Next Y-2.13%
EPS Next 2Y4.8%
EPS Next 3Y6.96%
EPS Next 5Y7.36%
Revenue 1Y (TTM)2.83%
Revenue growth 3Y12.95%
Revenue growth 5Y9.88%
Sales Q2Q%1.56%
Revenue Next Year2.78%
Revenue Next 2Y4.68%
Revenue Next 3Y5.27%
Revenue Next 5Y7.59%
EBIT growth 1Y-9.37%
EBIT growth 3Y25.41%
EBIT growth 5Y16.2%
EBIT Next Year-2.86%
EBIT Next 3Y6.99%
EBIT Next 5Y6.98%
FCF growth 1Y86.9%
FCF growth 3Y0.54%
FCF growth 5Y27.97%
OCF growth 1Y78.21%
OCF growth 3Y1.69%
OCF growth 5Y26.92%