Why NYSE:WSO Stands Out as a Quality Stock.

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 course 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

• WATSCO INC has shown strong performance in revenue growth over the past 5 years, with a 10.87% increase. This indicates the company's ability to generate consistent revenue growth and reflects its potential for long-term success.
• WATSCO INC exhibits a strong ROIC excluding cash and goodwill, indicating efficient capital utilization and profitable operations. The 26.98% reflects the company's ability to generate returns on invested capital and underscores its commitment to delivering value to shareholders.
• WATSCO INC demonstrates a well-balanced Debt/Free Cash Flow Ratio of 1.19, indicating effective debt management and strong cash flow generation. This ratio suggests the company has a sustainable financial position and the capacity to allocate capital efficiently.
• The Profit Quality (5-year) of WATSCO INC stands at 120.0%, highlighting its ability to consistently generate reliable profits. This metric underscores the company's strong business fundamentals and reinforces its position as a financially stable entity.
• 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.
• WATSCO INC has achieved superior EBIT 5-year growth compared to its Revenue 5-year growth. This demonstrates the company's ability to maximize its profitability through effective cost management and operational strategies.

Zooming in on the fundamentals.

ChartMill employs a sophisticated system to assign a Fundamental Rating to every stock in its analysis. This rating, which ranges from 0 to 10, is determined by carefully assessing multiple fundamental indicators and properties.

We assign a fundamental rating of 6 out of 10 to WSO. WSO was compared to 54 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 would make WSO suitable for quality investing!

For an up to date full fundamental analysis you can check the fundamental report of WSO

Our Caviar Cruise screen will find you more ideas suited for quality investing.

Keep in mind

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.