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. Both the health and profitability get an excellent rating, making WSO a very profitable company, without any liquidiy or solvency issues. WSO is valied quite expensively at the moment, while it does show a decent growth rate. 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
WSO had positive earnings in the past year.
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.
With a decent Return On Equity value of 17.24%, WSO is doing good in the industry, outperforming 72.00% of the companies in the same industry.
WSO's Return On Invested Capital of 15.48% is amongst the best of the industry. WSO outperforms 92.00% of its industry peers.
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 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
The Profit Margin of WSO (6.55%) is better than 70.00% of its industry peers.
WSO's Profit Margin has improved in the last couple of years.
WSO has a Operating Margin of 9.80%. This is in the better half of the industry: WSO outperforms 70.00% of its industry peers.
WSO's Operating Margin has improved in the last couple of years.
WSO has a Gross Margin (27.92%) which is in line with its industry peers.
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so WSO is creating value.
The number of shares outstanding for WSO has been increased compared to 1 year ago.
The number of shares outstanding for WSO has been increased compared to 5 years ago.
WSO has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 7.98 indicates that WSO is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 7.98, WSO belongs to the top of the industry, outperforming 88.00% of the companies in the same industry.
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's Debt to FCF ratio of 0.02 is amongst the best of 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 | 7.98 |
ROIC/WACC1.59
WACC9.76%
2.3 Liquidity
A Current Ratio of 3.84 indicates that WSO has no problem at all paying its short term obligations.
The Current ratio of WSO (3.84) is better than 88.00% of its industry peers.
WSO has a Quick Ratio of 1.86. This is a normal value and indicates that WSO is financially healthy and should not expect problems in meeting its short term obligations.
WSO has a better Quick ratio (1.86) than 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%.
WSO shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.81% yearly.
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
The Earnings Per Share is expected to grow by 11.57% on average over the next years. This is quite good.
The Revenue is expected to grow by 8.19% on average over the next years. This is quite good.
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
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
Based on the Price/Earnings ratio of 26.32, the valuation of WSO can be described as expensive.
WSO's Price/Earnings ratio is in line with the industry average.
WSO's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.51.
With a Price/Forward Earnings ratio of 25.43, WSO can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WSO is on the same level as its industry peers.
The average S&P500 Price/Forward Earnings ratio is at 23.13. WSO is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.32 | ||
| Fwd PE | 25.43 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WSO is on the same level as its industry peers.
WSO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. WSO is cheaper than 66.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.41 | ||
| EV/EBITDA | 17.31 |
4.3 Compensation for Growth
WSO has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.68
EPS Next 2Y0.01%
EPS Next 3Y2.86%
5. Dividend
5.1 Amount
WSO has a Yearly Dividend Yield of 3.26%.
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
On average, the dividend of WSO grows each year by 11.05%, 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)11.05%
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
WACC9.76%
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%.