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Why the quality investor may take a look at NYSE:WSO.

By Mill Chart

Last update: Apr 4, 2024

In this article we will dive into WATSCO INC (NYSE:WSO) as a possible candidate for quality investing. Investors should always do their own research, but we noticed WATSCO INC showing up in our Caviar Cruise quality screen, which makes it worth to investigate a bit more.

A Deep Dive into WATSCO INC's Quality Metrics.

  • WATSCO INC has shown strong performance in revenue growth over the past 5 years, with a 9.88% increase. This indicates the company's ability to generate consistent revenue growth and reflects its potential for long-term success.
  • With a robust ROIC excluding cash and goodwill at 29.77%, WATSCO INC showcases its effective allocation of capital and operational excellence. This metric signifies the company's ability to generate attractive returns and supports its long-term financial performance.
  • The Debt/Free Cash Flow Ratio of WATSCO INC stands at 0.05, reflecting the company's prudent capital structure and cash flow dynamics. This ratio highlights the company's ability to generate robust free cash flow relative to its debt obligations.
  • WATSCO INC exhibits impressive Profit Quality (5-year) with a 128.0% ratio, reflecting its consistent ability to generate high-quality profits. This metric underscores the company's strong financial performance and commitment to delivering sustainable earnings.
  • WATSCO INC has consistently achieved strong EBIT growth over the past 5 years, with a 16.2% increase. This underscores the company's effective management of its operating income and suggests a positive outlook for future profitability.
  • With EBIT 5-year growth outpacing its Revenue 5-year growth, WATSCO INC showcases its effective cost management and enhanced operational performance. This suggests the company's ability to generate higher earnings from its revenue streams.

What is the full fundamental picture of NYSE:WSO telling us.

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.

WSO gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 52 industry peers in the Trading Companies & Distributors industry. WSO scores excellent points on both the profitability and health parts. This is a solid base for a good stock. WSO is quite expensive at the moment. It does show a decent growth rate.

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

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


This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.