Should you consider NYSE:WSO for quality investing?

Quality investors are looking for the best of the best. Companies which are growing steadily and consistently, but are also in excellent financial condition. We will have a look here to see if WATSCO INC (NYSE:WSO) is suited for quality investing. Investors should of couse do their own research, but we spotted WATSCO INC showing up in our Caviar Cruise quality screen, so it may be worth spending some more time on it.

Looking into the quality metrics of WATSCO INC

• Over the past 5 years, WATSCO INC has experienced impressive revenue growth, with 10.87% increase. This demonstrates the company's ability to effectively expand its top line and suggests a positive outlook for future revenue generation.
• With a notable ROIC excluding cash and goodwill at 26.98%, WATSCO INC demonstrates its commitment to generating sustainable returns for shareholders. This metric emphasizes the company's effective use of capital and its ability to deliver long-term value.
• With a Debt/Free Cash Flow Ratio of 1.19, WATSCO INC exhibits solid financial health and responsible debt management practices. This ratio indicates the company's ability to generate ample free cash flow to meet its debt obligations and pursue growth opportunities.
• With a robust Profit Quality (5-year) ratio of 120.0%, WATSCO INC highlights its ability to consistently generate high-quality profits. This metric reflects the company's effective management and operational excellence in delivering reliable earnings over the long term.
• WATSCO INC has experienced impressive EBIT growth over the past 5 years, with 18.24% increase. This reflects the company's effective operational performance and highlights its potential for long-term financial success.
• The EBIT 5-year growth of WATSCO INC has outpaced its Revenue 5-year growth, reflecting the company's focus on optimizing its profitability and generating sustainable earnings. This trend underscores its strong financial management.

What else is there to say on the fundamentals of NYSE:WSO?

As part of its analysis, ChartMill provides a comprehensive Fundamental Rating for each stock. This rating, ranging from 0 to 10, is updated on a daily basis and is based on the evaluation of various fundamental indicators and properties.

Overall WSO gets a fundamental rating of 6 out of 10. We evaluated WSO against 52 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 quite expensive at the moment. It does show a decent growth rate. These ratings could make WSO a good candidate for quality investing.

Check the latest full fundamental report of WSO for a complete fundamental analysis.

More ideas for quality investing can be found on ChartMill in our Caviar Cruise screen.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.