WATSCO INC -CL B (WSO.B) Stock Fundamental Analysis
NYSE:WSO.B - New York Stock Exchange, Inc. - US9426221019 - Common Stock - Currency: USD
Overall WSO.B gets a fundamental rating of 6 out of 10. We evaluated WSO.B against 49 industry peers in the Trading Companies & Distributors industry. While WSO.B belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. While showing a medium growth rate, WSO.B is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
WSO.B had positive earnings in the past year.
WSO.B had a positive operating cash flow in the past year.
Each year in the past 5 years WSO.B has been profitable.
In the past 5 years WSO.B always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 11.02%, WSO.B belongs to the top of the industry, outperforming 91.84% of the companies in the same industry.
WSO.B's Return On Equity of 18.42% is fine compared to the rest of the industry. WSO.B outperforms 71.43% of its industry peers.
The Return On Invested Capital of WSO.B (16.66%) is better than 91.84% of its industry peers.
The Average Return On Invested Capital over the past 3 years for WSO.B is significantly above the industry average of 9.65%.
The last Return On Invested Capital (16.66%) for WSO.B is well below the 3 year average (20.81%), which needs to be investigated, but indicates that WSO.B had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.02% | ||
| ROE | 18.42% | ||
| ROIC | 16.66% |
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.B (6.47%) is better than 71.43% of its industry peers.
In the last couple of years the Profit Margin of WSO.B has grown nicely.
WSO.B has a better Operating Margin (9.72%) than 69.39% of its industry peers.
WSO.B's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 26.95%, WSO.B is in line with its industry, outperforming 42.86% of the companies in the same industry.
In the last couple of years the Gross Margin of WSO.B has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.72% | ||
| PM (TTM) | 6.47% | ||
| GM | 26.95% |
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), WSO.B is creating value.
The number of shares outstanding for WSO.B has been increased compared to 1 year ago.
The number of shares outstanding for WSO.B has been increased compared to 5 years ago.
The debt/assets ratio for WSO.B has been reduced compared to a year ago.
2.2 Solvency
WSO.B has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.25 | ||
| Altman-Z | N/A |
ROIC/WACC1.65
WACC10.1%
2.3 Liquidity
A Current Ratio of 3.28 indicates that WSO.B has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 3.28, WSO.B is in the better half of the industry, outperforming 79.59% of the companies in the same industry.
A Quick Ratio of 1.36 indicates that WSO.B should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.36, WSO.B perfoms like the industry average, outperforming 55.10% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.28 | ||
| Quick Ratio | 1.36 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 0.08% over the past year.
The Earnings Per Share has been growing by 15.67% on average over the past years. This is quite good.
The Revenue has been growing slightly by 3.92% in the past year.
WSO.B shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.81% yearly.
EPS 1Y (TTM)0.08%
EPS 3Y7.25%
EPS 5Y15.67%
EPS Q2Q%-11.06%
Revenue 1Y (TTM)3.92%
Revenue growth 3Y6.65%
Revenue growth 5Y9.81%
Sales Q2Q%-2.17%
3.2 Future
WSO.B is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.55% yearly.
WSO.B is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.91% yearly.
EPS Next Y9.56%
EPS Next 2Y9.16%
EPS Next 3Y10.16%
EPS Next 5Y9.55%
Revenue Next Year5.23%
Revenue Next 2Y5.26%
Revenue Next 3Y5.46%
Revenue Next 5Y7.91%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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
With a Price/Earnings ratio of 34.59, WSO.B can be considered very expensive at the moment.
WSO.B's Price/Earnings ratio is a bit more expensive when compared to the industry. WSO.B is more expensive than 65.31% of the companies in the same industry.
WSO.B is valuated rather expensively when we compare the Price/Earnings ratio to 26.46, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 28.50, which means the current valuation is very expensive for WSO.B.
WSO.B's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. WSO.B is more expensive than 71.43% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of WSO.B to the average of the S&P500 Index (22.30), we can say WSO.B is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.59 | ||
| Fwd PE | 28.5 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WSO.B indicates a slightly more expensive valuation: WSO.B is more expensive than 71.43% of the companies listed in the same industry.
WSO.B's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.59 | ||
| EV/EBITDA | 22.98 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates WSO.B does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of WSO.B may justify a higher PE ratio.
PEG (NY)3.62
PEG (5Y)2.21
EPS Next 2Y9.16%
EPS Next 3Y10.16%
5. Dividend
5.1 Amount
WSO.B has a Yearly Dividend Yield of 2.50%.
WSO.B's Dividend Yield is rather good when compared to the industry average which is at 2.70. WSO.B pays more dividend than 85.71% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, WSO.B has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.5% |
5.2 History
The dividend of WSO.B is nicely growing with an annual growth rate of 11.05%!
WSO.B has been paying a dividend for at least 10 years, so it has a reliable track record.
WSO.B 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
88.76% of the earnings are spent on dividend by WSO.B. This is not a sustainable payout ratio.
WSO.B's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP88.76%
EPS Next 2Y9.16%
EPS Next 3Y10.16%
NYSE:WSO.B (5/29/2025, 8:22:04 PM)
450
-21.49 (-4.56%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners105.71%
Inst Owner Change-5.35%
Ins Owners0.39%
Ins Owner ChangeN/A
Market Cap18.22B
Analysts67.62
Price Target512.33 (13.85%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.5% |
Yearly Dividend9.55
Dividend Growth(5Y)11.05%
DP88.76%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-2.77%
Min EPS beat(2)-15.33%
Max EPS beat(2)9.8%
EPS beat(4)1
Avg EPS beat(4)-5.58%
Min EPS beat(4)-15.33%
Max EPS beat(4)9.8%
EPS beat(8)2
Avg EPS beat(8)-6.76%
EPS beat(12)4
Avg EPS beat(12)1.51%
EPS beat(16)8
Avg EPS beat(16)7.52%
Revenue beat(2)1
Avg Revenue beat(2)-2.02%
Min Revenue beat(2)-8.37%
Max Revenue beat(2)4.34%
Revenue beat(4)1
Avg Revenue beat(4)-2.92%
Min Revenue beat(4)-8.37%
Max Revenue beat(4)4.34%
Revenue beat(8)2
Avg Revenue beat(8)-3.1%
Revenue beat(12)2
Avg Revenue beat(12)-2.76%
Revenue beat(16)5
Avg Revenue beat(16)3.76%
PT rev (1m)0%
PT rev (3m)6.65%
EPS NQ rev (1m)-1.53%
EPS NQ rev (3m)-3.26%
EPS NY rev (1m)-2.4%
EPS NY rev (3m)-3.08%
Revenue NQ rev (1m)-1.82%
Revenue NQ rev (3m)-2.29%
Revenue NY rev (1m)-1.91%
Revenue NY rev (3m)-1.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.59 | ||
| Fwd PE | 28.5 | ||
| P/S | 2.4 | ||
| P/FCF | 39.59 | ||
| P/OCF | 37.04 | ||
| P/B | 6.84 | ||
| P/tB | 10.03 | ||
| EV/EBITDA | 22.98 |
EPS(TTM)13.01
EY2.89%
EPS(NY)15.79
Fwd EY3.51%
FCF(TTM)11.37
FCFY2.53%
OCF(TTM)12.15
OCFY2.7%
SpS187.36
BVpS65.84
TBVpS44.88
PEG (NY)3.62
PEG (5Y)2.21
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.02% | ||
| ROE | 18.42% | ||
| ROCE | 20.89% | ||
| ROIC | 16.66% | ||
| ROICexc | 18.98% | ||
| ROICexgc | 26.14% | ||
| OM | 9.72% | ||
| PM (TTM) | 6.47% | ||
| GM | 26.95% | ||
| FCFM | 6.07% |
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%
ROICexcg growth 3Y-0.91%
ROICexcg 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-Score7
Asset Turnover1.7
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.25 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 75.96% | ||
| Cap/Sales | 0.42% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 63.13% | ||
| Profit Quality | 93.71% | ||
| Current Ratio | 3.28 | ||
| Quick Ratio | 1.36 | ||
| Altman-Z | N/A |
F-Score7
WACC10.1%
ROIC/WACC1.65
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)0.08%
EPS 3Y7.25%
EPS 5Y15.67%
EPS Q2Q%-11.06%
EPS Next Y9.56%
EPS Next 2Y9.16%
EPS Next 3Y10.16%
EPS Next 5Y9.55%
Revenue 1Y (TTM)3.92%
Revenue growth 3Y6.65%
Revenue growth 5Y9.81%
Sales Q2Q%-2.17%
Revenue Next Year5.23%
Revenue Next 2Y5.26%
Revenue Next 3Y5.46%
Revenue Next 5Y7.91%
EBIT growth 1Y1.18%
EBIT growth 3Y7.24%
EBIT growth 5Y16.07%
EBIT Next Year16.28%
EBIT Next 3Y11.08%
EBIT Next 5Y9.61%
FCF growth 1Y-22.2%
FCF growth 3Y31.86%
FCF growth 5Y18.5%
OCF growth 1Y-21.47%
OCF growth 3Y30.29%
OCF growth 5Y18.15%