WATSCO INC -CL B (WSO.B) Stock Fundamental Analysis
NYSE:WSO.B - New York Stock Exchange, Inc. - US9426221019 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to WSO.B. WSO.B was compared to 50 industry peers in the Trading Companies & Distributors industry. WSO.B has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. WSO.B is valied quite expensively at the moment, while it does show a decent growth rate. This makes WSO.B very considerable for quality investing!
1. Profitability
1.1 Basic Checks
WSO.B had positive earnings in the past year.
In the past year WSO.B had a positive cash flow from operations.
In the past 5 years WSO.B has always been profitable.
In the past 5 years WSO.B always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of WSO.B (11.02%) is better than 92.00% of its industry peers.
WSO.B has a Return On Equity of 18.42%. This is in the better half of the industry: WSO.B outperforms 74.00% of its industry peers.
WSO.B has a better Return On Invested Capital (16.66%) than 92.00% 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 9.94%.
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
WSO.B's Profit Margin of 6.47% is fine compared to the rest of the industry. WSO.B outperforms 68.00% 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 70.00% of its industry peers.
In the last couple of years the Operating Margin of WSO.B has grown nicely.
Looking at the Gross Margin, with a value of 26.95%, WSO.B is in line with its industry, outperforming 42.00% of the companies in the same industry.
WSO.B's Gross Margin has improved in the last couple of years.
| 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 an Altman-Z score of 9.12. This indicates that WSO.B is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 9.12, WSO.B belongs to the top of the industry, outperforming 94.00% of the companies in the same industry.
WSO.B has a debt to FCF ratio of 0.03. This is a very positive value and a sign of high solvency as it would only need 0.03 years to pay back of all of its debts.
WSO.B has a Debt to FCF ratio of 0.03. This is amongst the best in the industry. WSO.B outperforms 92.00% 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.
Looking at the Debt to Equity ratio, with a value of 0.01, WSO.B belongs to the top of the industry, outperforming 84.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.03 | ||
| Altman-Z | 9.12 |
ROIC/WACC1.66
WACC10.04%
2.3 Liquidity
A Current Ratio of 3.28 indicates that WSO.B has no problem at all paying its short term obligations.
With a decent Current ratio value of 3.28, WSO.B is doing good in the industry, outperforming 80.00% 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 58.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.28 | ||
| Quick Ratio | 1.36 |
3. Growth
3.1 Past
WSO.B shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 0.08%.
The Earnings Per Share has been growing by 15.67% on average over the past years. This is quite good.
WSO.B shows a small growth in Revenue. In the last year, the Revenue has grown by 3.92%.
Measured over the past years, WSO.B shows a quite strong growth in Revenue. The Revenue has been growing by 9.81% on average per year.
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
Based on estimates for the next years, WSO.B will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.33% on average per year.
The Revenue is expected to grow by 8.09% on average over the next years. This is quite good.
EPS Next Y9.67%
EPS Next 2Y9.09%
EPS Next 3Y10.16%
EPS Next 5Y9.33%
Revenue Next Year5.26%
Revenue Next 2Y5.26%
Revenue Next 3Y5.46%
Revenue Next 5Y8.09%
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 33.42, WSO.B can be considered very expensive at the moment.
Based on the Price/Earnings ratio, WSO.B is valued a bit more expensive than the industry average as 62.00% of the companies are valued more cheaply.
The average S&P500 Price/Earnings ratio is at 26.73. WSO.B is valued slightly more expensive when compared to this.
With a Price/Forward Earnings ratio of 27.57, WSO.B can be considered very expensive at the moment.
WSO.B's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. WSO.B is more expensive than 62.00% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 34.61. WSO.B is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.42 | ||
| Fwd PE | 27.57 |
4.2 Price Multiples
72.00% 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 | 38.3 | ||
| EV/EBITDA | 22.22 |
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)3.46
PEG (5Y)2.13
EPS Next 2Y9.09%
EPS Next 3Y10.16%
5. Dividend
5.1 Amount
WSO.B has a Yearly Dividend Yield of 2.62%.
Compared to an average industry Dividend Yield of 2.04, WSO.B pays a better dividend. On top of this WSO.B pays more dividend than 90.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.39, WSO.B has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.62% |
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
WSO.B pays out 88.76% of its income as dividend. 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.
DP88.76%
EPS Next 2Y9.09%
EPS Next 3Y10.16%
NYSE:WSO.B (8/4/2025, 8:04:00 PM)
434.825
-2.66 (-0.61%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners106.27%
Inst Owner Change0%
Ins Owners0.39%
Ins Owner ChangeN/A
Market Cap17.61B
Analysts67.62
Price Target512.33 (17.82%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.62% |
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)0%
EPS NQ rev (1m)0.1%
EPS NQ rev (3m)-1.11%
EPS NY rev (1m)0.1%
EPS NY rev (3m)-2.3%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.78%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.89%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.42 | ||
| Fwd PE | 27.57 | ||
| P/S | 2.32 | ||
| P/FCF | 38.3 | ||
| P/OCF | 35.82 | ||
| P/B | 6.61 | ||
| P/tB | 8.79 | ||
| EV/EBITDA | 22.22 |
EPS(TTM)13.01
EY2.99%
EPS(NY)15.77
Fwd EY3.63%
FCF(TTM)11.35
FCFY2.61%
OCF(TTM)12.14
OCFY2.79%
SpS187.22
BVpS65.79
TBVpS49.44
PEG (NY)3.46
PEG (5Y)2.13
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.02% | ||
| ROE | 18.42% | ||
| ROCE | 20.89% | ||
| ROIC | 16.66% | ||
| ROICexc | 18.98% | ||
| ROICexgc | 24.14% | ||
| OM | 9.72% | ||
| PM (TTM) | 6.47% | ||
| GM | 26.95% | ||
| FCFM | 6.06% |
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 | 0.01 | ||
| Debt/FCF | 0.03 | ||
| Debt/EBITDA | 0.02 | ||
| Cap/Depr | 76.19% | ||
| Cap/Sales | 0.42% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 63.13% | ||
| Profit Quality | 93.69% | ||
| Current Ratio | 3.28 | ||
| Quick Ratio | 1.36 | ||
| Altman-Z | 9.12 |
F-Score7
WACC10.04%
ROIC/WACC1.66
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 Y9.67%
EPS Next 2Y9.09%
EPS Next 3Y10.16%
EPS Next 5Y9.33%
Revenue 1Y (TTM)3.92%
Revenue growth 3Y6.65%
Revenue growth 5Y9.81%
Sales Q2Q%-2.17%
Revenue Next Year5.26%
Revenue Next 2Y5.26%
Revenue Next 3Y5.46%
Revenue Next 5Y8.09%
EBIT growth 1Y1.18%
EBIT growth 3Y7.24%
EBIT growth 5Y16.07%
EBIT Next Year14.6%
EBIT Next 3Y10.81%
EBIT Next 5Y9.41%
FCF growth 1Y-22.22%
FCF growth 3Y31.86%
FCF growth 5Y18.5%
OCF growth 1Y-21.47%
OCF growth 3Y30.29%
OCF growth 5Y18.15%