WATSCO INC -CL B (WSO.B) Stock Fundamental Analysis
NYSE:WSO.B - New York Stock Exchange, Inc. - US9426221019 - Common Stock - Currency: USD
Taking everything into account, WSO.B scores 6 out of 10 in our fundamental rating. WSO.B was compared to 50 industry peers in the Trading Companies & Distributors industry. WSO.B scores excellent points on both the profitability and health parts. This is a solid base for a good stock. WSO.B is quite expensive at the moment. It does show a decent growth rate.
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.
In the past 5 years WSO.B has always been profitable.
WSO.B had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of WSO.B (11.12%) is better than 90.00% of its industry peers.
WSO.B's Return On Equity of 18.75% is fine compared to the rest of the industry. WSO.B outperforms 76.00% of its industry peers.
The Return On Invested Capital of WSO.B (17.14%) is better than 94.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for WSO.B is significantly above the industry average of 9.15%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.12% | ||
| ROE | 18.75% | ||
| ROIC | 17.14% |
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
Looking at the Profit Margin, with a value of 6.54%, WSO.B is in the better half of the industry, outperforming 70.00% of the companies in the same industry.
WSO.B's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 9.86%, WSO.B is doing good in the industry, outperforming 68.00% of the companies in the same industry.
In the last couple of years the Operating Margin of WSO.B has grown nicely.
WSO.B has a Gross Margin of 26.84%. This is in the lower half of the industry: WSO.B underperforms 62.00% of its industry peers.
WSO.B's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.86% | ||
| PM (TTM) | 6.54% | ||
| GM | 26.84% |
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
WSO.B has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
WSO.B has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, WSO.B has more shares outstanding
The debt/assets ratio for WSO.B has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 9.99 indicates that WSO.B is not in any danger for bankruptcy at the moment.
WSO.B has a Altman-Z score of 9.99. This is amongst the best in the industry. WSO.B outperforms 94.00% of its industry peers.
WSO.B has a debt to FCF ratio of 0.02. This is a very positive value and a sign of high solvency as it would only need 0.02 years to pay back of all of its debts.
The Debt to FCF ratio of WSO.B (0.02) is better than 94.00% of its industry peers.
WSO.B has a Debt/Equity ratio of 0.01. This is a healthy value indicating a solid balance between debt and equity.
With an excellent Debt to Equity ratio value of 0.01, WSO.B belongs to the best of the industry, outperforming 84.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.02 | ||
| Altman-Z | 9.99 |
ROIC/WACC1.78
WACC9.65%
2.3 Liquidity
A Current Ratio of 3.13 indicates that WSO.B has no problem at all paying its short term obligations.
With a decent Current ratio value of 3.13, WSO.B is doing good in the industry, outperforming 74.00% of the companies in the same industry.
A Quick Ratio of 1.72 indicates that WSO.B should not have too much problems paying its short term obligations.
WSO.B has a better Quick ratio (1.72) than 70.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.13 | ||
| Quick Ratio | 1.72 |
3. Growth
3.1 Past
WSO.B shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -3.00%.
WSO.B shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.67% yearly.
The Revenue has been growing slightly by 4.59% 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)-3%
EPS 3Y7.25%
EPS 5Y15.67%
EPS Q2Q%15.05%
Revenue 1Y (TTM)4.59%
Revenue growth 3Y6.65%
Revenue growth 5Y9.81%
Sales Q2Q%9.4%
3.2 Future
Based on estimates for the next years, WSO.B will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.55% on average per year.
Based on estimates for the next years, WSO.B will show a small growth in Revenue. The Revenue will grow by 7.91% on average per year.
EPS Next Y12.25%
EPS Next 2Y11.33%
EPS Next 3Y10.71%
EPS Next 5Y9.55%
Revenue Next Year7.28%
Revenue Next 2Y6.51%
Revenue Next 3Y6.19%
Revenue Next 5Y7.91%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 33.75, the valuation of WSO.B can be described as expensive.
Based on the Price/Earnings ratio, WSO.B is valued a bit more expensive than 62.00% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.18. WSO.B is around the same levels.
The Price/Forward Earnings ratio is 30.07, which means the current valuation is very expensive for WSO.B.
66.00% of the companies in the same industry are cheaper than WSO.B, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 20.81. WSO.B is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.75 | ||
| Fwd PE | 30.07 |
4.2 Price Multiples
80.00% of the companies in the same industry are cheaper than WSO.B, based on the Enterprise Value to EBITDA ratio.
WSO.B's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.69 | ||
| EV/EBITDA | 24.83 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
WSO.B has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.75
PEG (5Y)2.15
EPS Next 2Y11.33%
EPS Next 3Y10.71%
5. Dividend
5.1 Amount
WSO.B has a Yearly Dividend Yield of 2.10%.
Compared to an average industry Dividend Yield of 2.95, WSO.B pays a better dividend. On top of this WSO.B pays more dividend than 82.00% of the companies listed in the same industry.
WSO.B's Dividend Yield is comparable with the S&P500 average which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.1% |
5.2 History
The dividend of WSO.B is nicely growing with an annual growth rate of 11.05%!
WSO.B has paid a dividend for at least 10 years, which is 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
85.00% of the earnings are spent on dividend by WSO.B. This is not a sustainable payout ratio.
The dividend of WSO.B is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP85%
EPS Next 2Y11.33%
EPS Next 3Y10.71%
NYSE:WSO.B (4/30/2025, 8:04:00 PM)
447.21
-59.89 (-11.81%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners105.71%
Inst Owner Change0%
Ins Owners0.39%
Ins Owner ChangeN/A
Market Cap20.58B
Analysts68
Price Target512.33 (14.56%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.1% |
Yearly Dividend9.55
Dividend Growth(5Y)11.05%
DP85%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.94%
Min EPS beat(2)-11.69%
Max EPS beat(2)9.8%
EPS beat(4)1
Avg EPS beat(4)-3.15%
Min EPS beat(4)-11.69%
Max EPS beat(4)9.8%
EPS beat(8)3
Avg EPS beat(8)-2.52%
EPS beat(12)5
Avg EPS beat(12)7.93%
EPS beat(16)9
Avg EPS beat(16)11.75%
Revenue beat(2)1
Avg Revenue beat(2)-0.17%
Min Revenue beat(2)-4.68%
Max Revenue beat(2)4.34%
Revenue beat(4)1
Avg Revenue beat(4)-1.53%
Min Revenue beat(4)-4.68%
Max Revenue beat(4)4.34%
Revenue beat(8)2
Avg Revenue beat(8)-2.2%
Revenue beat(12)3
Avg Revenue beat(12)-1.27%
Revenue beat(16)6
Avg Revenue beat(16)4.62%
PT rev (1m)6.65%
PT rev (3m)6.65%
EPS NQ rev (1m)-0.48%
EPS NQ rev (3m)-1.35%
EPS NY rev (1m)-1.34%
EPS NY rev (3m)-0.83%
Revenue NQ rev (1m)-0.3%
Revenue NQ rev (3m)0.48%
Revenue NY rev (1m)0.86%
Revenue NY rev (3m)0.94%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.75 | ||
| Fwd PE | 30.07 | ||
| P/S | 2.7 | ||
| P/FCF | 27.69 | ||
| P/OCF | 26.62 | ||
| P/B | 7.74 | ||
| P/tB | 10.31 | ||
| EV/EBITDA | 24.83 |
EPS(TTM)13.25
EY2.96%
EPS(NY)14.87
Fwd EY3.33%
FCF(TTM)16.15
FCFY3.61%
OCF(TTM)16.8
OCFY3.76%
SpS165.58
BVpS57.75
TBVpS43.4
PEG (NY)2.75
PEG (5Y)2.15
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.12% | ||
| ROE | 18.75% | ||
| ROCE | 21.49% | ||
| ROIC | 17.14% | ||
| ROICexc | 22.08% | ||
| ROICexgc | 29.18% | ||
| OM | 9.86% | ||
| PM (TTM) | 6.54% | ||
| GM | 26.84% | ||
| FCFM | 9.75% |
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-Score4
Asset Turnover1.7
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.02 | ||
| Debt/EBITDA | 0.02 | ||
| Cap/Depr | 73.71% | ||
| Cap/Sales | 0.39% | ||
| Interest Coverage | 775.31 | ||
| Cash Conversion | 97.6% | ||
| Profit Quality | 149.13% | ||
| Current Ratio | 3.13 | ||
| Quick Ratio | 1.72 | ||
| Altman-Z | 9.99 |
F-Score4
WACC9.65%
ROIC/WACC1.78
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)-3%
EPS 3Y7.25%
EPS 5Y15.67%
EPS Q2Q%15.05%
EPS Next Y12.25%
EPS Next 2Y11.33%
EPS Next 3Y10.71%
EPS Next 5Y9.55%
Revenue 1Y (TTM)4.59%
Revenue growth 3Y6.65%
Revenue growth 5Y9.81%
Sales Q2Q%9.4%
Revenue Next Year7.28%
Revenue Next 2Y6.51%
Revenue Next 3Y6.19%
Revenue Next 5Y7.91%
EBIT growth 1Y-2.26%
EBIT growth 3Y7.24%
EBIT growth 5Y16.07%
EBIT Next Year16.27%
EBIT Next 3Y11.05%
EBIT Next 5Y9.61%
FCF growth 1Y41.13%
FCF growth 3Y31.86%
FCF growth 5Y18.5%
OCF growth 1Y37.57%
OCF growth 3Y30.29%
OCF growth 5Y18.15%