WATSCO INC (WSO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:WSO - US9426222009 - Common Stock
345.165 USD
+0.58 (+0.17%)
Overall WSO gets a fundamental rating of 7 out of 10. We evaluated WSO against 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. While showing a medium growth rate, WSO is valued expensive at the moment. Finally WSO also has an excellent dividend rating. With these ratings, WSO could be worth investigating further for dividend and quality investing!.
1. Profitability
1.1 Basic Checks
In the past year WSO was profitable.
In the past year WSO had a positive cash flow from operations.
In the past 5 years WSO has always been profitable.
WSO had a positive operating cash flow in each of the past 5 years.
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.
The Average Return On Invested Capital over the past 3 years for WSO is significantly above the industry average of 9.63%.
The last Return On Invested Capital (15.48%) for WSO is well below the 3 year average (20.81%), which needs to be investigated, but indicates that WSO had better years and this may not be a problem.
| 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
With a decent Profit Margin value of 6.55%, WSO is doing good in the industry, outperforming 70.00% of the companies in the same industry.
WSO's Profit Margin has improved in the last couple of years.
The Operating Margin of WSO (9.80%) 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 27.92%, WSO perfoms like the industry average, outperforming 46.00% of the companies in the same industry.
In the last couple of years the Gross Margin of WSO has grown nicely.
| 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so WSO is creating value.
Compared to 1 year ago, WSO has more shares outstanding
Compared to 5 years ago, WSO has more shares outstanding
WSO has a better debt/assets ratio than last year.
2.2 Solvency
WSO has an Altman-Z score of 8.00. This indicates that WSO is financially healthy and has little risk of bankruptcy at the moment.
WSO has a Altman-Z score of 8.00. This is amongst the best in the industry. WSO outperforms 88.00% 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.
WSO has a Debt to FCF ratio of 0.02. This is amongst the best in the industry. WSO outperforms 92.00% of its industry peers.
A Debt/Equity ratio of 0.00 indicates that WSO is not too dependend on debt financing.
WSO has a better Debt to Equity ratio (0.00) than 86.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.02 | ||
| Altman-Z | 8 |
ROIC/WACC1.57
WACC9.88%
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.
With an excellent Current ratio value of 3.84, WSO belongs to the best of the industry, outperforming 88.00% of the companies in the same industry.
A Quick Ratio of 1.86 indicates that WSO should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.86, WSO is doing good in the industry, outperforming 72.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.84 | ||
| Quick Ratio | 1.86 |
3. Growth
3.1 Past
The earnings per share for WSO have decreased by -1.05% 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 15.67% yearly.
The Revenue has decreased by -0.71% in the past year.
Measured over the past years, WSO shows a quite strong growth in Revenue. The Revenue has been growing by 9.81% on average per year.
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.
WSO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.19% yearly.
EPS Next Y-6.04%
EPS Next 2Y0.29%
EPS Next 3Y3.15%
EPS Next 5Y11.57%
Revenue Next Year-3.47%
Revenue Next 2Y0.3%
Revenue Next 3Y1.8%
Revenue Next 5Y8.19%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 26.97, which means the current valuation is very expensive for WSO.
The rest of the industry has a similar Price/Earnings ratio as WSO.
WSO is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.55, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 25.90, WSO can be considered very expensive at the moment.
The rest of the industry has a similar Price/Forward Earnings ratio as WSO.
The average S&P500 Price/Forward Earnings ratio is at 23.78. WSO is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.97 | ||
| Fwd PE | 25.9 |
4.2 Price Multiples
60.00% of the companies in the same industry are cheaper than WSO, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of WSO indicates a somewhat cheap valuation: WSO is cheaper than 66.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.06 | ||
| EV/EBITDA | 17.39 |
4.3 Compensation for Growth
WSO has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.72
EPS Next 2Y0.29%
EPS Next 3Y3.15%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.26%, WSO has a reasonable but not impressive dividend return.
WSO's Dividend Yield is rather good when compared to the industry average which is at 0.97. WSO pays more dividend than 90.00% of the companies in the same industry.
WSO's Dividend Yield is rather good when compared to the S&P500 average which is at 1.87.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.26% |
5.2 History
On average, the dividend of WSO grows each year by 11.05%, 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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
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 2Y0.29%
EPS Next 3Y3.15%
NYSE:WSO (12/16/2025, 9:55:06 AM)
345.165
+0.58 (+0.17%)
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 Cap14.00B
Revenue(TTM)7.41B
Net Income(TTM)485.36M
Analysts66
Price Target417.56 (20.97%)
Short Float %9.16%
Short Ratio6.55
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-Date
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)-5.48%
PT rev (3m)-12.78%
EPS NQ rev (1m)-0.48%
EPS NQ rev (3m)-24.36%
EPS NY rev (1m)-2.25%
EPS NY rev (3m)-10.14%
Revenue NQ rev (1m)-0.67%
Revenue NQ rev (3m)-8.23%
Revenue NY rev (1m)-1.06%
Revenue NY rev (3m)-4.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.97 | ||
| Fwd PE | 25.9 | ||
| P/S | 1.89 | ||
| P/FCF | 27.06 | ||
| P/OCF | 25.51 | ||
| P/B | 4.97 | ||
| P/tB | 6.53 | ||
| EV/EBITDA | 17.39 |
EPS(TTM)12.8
EY3.71%
EPS(NY)13.33
Fwd EY3.86%
FCF(TTM)12.76
FCFY3.7%
OCF(TTM)13.53
OCFY3.92%
SpS182.8
BVpS69.4
TBVpS52.83
PEG (NY)N/A
PEG (5Y)1.72
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 | 8 |
F-Score6
WACC9.88%
ROIC/WACC1.57
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 2Y0.29%
EPS Next 3Y3.15%
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 2Y0.3%
Revenue Next 3Y1.8%
Revenue Next 5Y8.19%
EBIT growth 1Y0.38%
EBIT growth 3Y7.24%
EBIT growth 5Y16.07%
EBIT Next Year-0.44%
EBIT Next 3Y6.2%
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.
What is the valuation status for WSO stock?
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 earnings growth outlook for WATSCO INC?
The Earnings per Share (EPS) of WATSCO INC (WSO) is expected to decline by -6.04% in the next year.
How sustainable is the dividend of WATSCO INC (WSO) stock?
The dividend rating of WATSCO INC (WSO) is 7 / 10 and the dividend payout ratio is 95.01%.