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 48 industry peers in the Trading Companies & Distributors industry. WSO.B gets an excellent profitability rating and is at the same time showing great financial health properties. 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
In the past year WSO.B was profitable.
In the past year WSO.B had a positive cash flow from operations.
WSO.B had positive earnings in each of the past 5 years.
WSO.B had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
WSO.B has a Return On Assets of 11.02%. This is amongst the best in the industry. WSO.B outperforms 89.80% of its industry peers.
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 87.76% 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 9.66%.
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 has a Profit Margin of 6.47%. This is in the better half of the industry: WSO.B outperforms 73.47% of its industry peers.
WSO.B's Profit Margin has improved in the last couple of years.
WSO.B has a better Operating Margin (9.72%) than 69.39% of its industry peers.
In the last couple of years the Operating Margin of WSO.B has grown nicely.
WSO.B has a Gross Margin (26.95%) which is in line with its industry peers.
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.
WSO.B has more shares outstanding than it did 1 year ago.
The number of shares outstanding for WSO.B has been increased compared to 5 years ago.
WSO.B has a better debt/assets ratio than last year.
2.2 Solvency
WSO.B has an Altman-Z score of 9.33. This indicates that WSO.B is financially healthy and has little risk of bankruptcy at the moment.
WSO.B has a better Altman-Z score (9.33) than 93.88% of its industry peers.
The Debt to FCF ratio of WSO.B is 0.03, which is an excellent value as it means it would take WSO.B, only 0.03 years of fcf income to pay off 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 89.80% 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.
The Debt to Equity ratio of WSO.B (0.01) is better than 83.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.03 | ||
| Altman-Z | 9.33 |
ROIC/WACC1.64
WACC10.14%
2.3 Liquidity
WSO.B has a Current Ratio of 3.28. This indicates that WSO.B is financially healthy and has no problem in meeting 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 77.55% of the companies in the same industry.
WSO.B has a Quick Ratio of 1.36. This is a normal value and indicates that WSO.B is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of WSO.B (1.36) is comparable to the rest of the 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%.
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 3.92% in the past year.
The Revenue has been growing by 9.81% on average over the past years. This is quite good.
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
The Earnings Per Share is expected to grow by 9.33% on average over the next years. This is quite good.
Based on estimates for the next years, WSO.B will show a quite strong growth in Revenue. The Revenue will grow by 8.09% on average per year.
EPS Next Y9.56%
EPS Next 2Y9.16%
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
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
A Price/Earnings ratio of 34.59 indicates a quite expensive valuation of WSO.B.
WSO.B's Price/Earnings ratio is a bit more expensive when compared to the industry. WSO.B is more expensive than 63.27% of the companies in the same industry.
WSO.B's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 26.69.
WSO.B is valuated quite expensively with a Price/Forward Earnings ratio of 28.50.
69.39% of the companies in the same industry are cheaper than WSO.B, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.29, WSO.B is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.59 | ||
| Fwd PE | 28.5 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WSO.B is valued a bit more expensive than the industry average as 73.47% of the companies are valued more cheaply.
WSO.B's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.63 | ||
| EV/EBITDA | 23.01 |
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
With a Yearly Dividend Yield of 2.71%, WSO.B has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.41, WSO.B pays a better dividend. On top of this WSO.B pays more dividend than 89.80% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.43, WSO.B has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.71% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
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.
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 Owners106.27%
Inst Owner Change-5.35%
Ins Owners0.39%
Ins Owner ChangeN/A
Market Cap18.23B
Analysts68
Price Target512.33 (13.85%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.71% |
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)0.32%
EPS NQ rev (3m)-1.16%
EPS NY rev (1m)0%
EPS NY rev (3m)-3.71%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)-1.65%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)-1.89%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.59 | ||
| Fwd PE | 28.5 | ||
| P/S | 2.4 | ||
| P/FCF | 39.63 | ||
| P/OCF | 37.07 | ||
| P/B | 6.84 | ||
| P/tB | 9.1 | ||
| EV/EBITDA | 23.01 |
EPS(TTM)13.01
EY2.89%
EPS(NY)15.79
Fwd EY3.51%
FCF(TTM)11.35
FCFY2.52%
OCF(TTM)12.14
OCFY2.7%
SpS187.22
BVpS65.79
TBVpS49.44
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 | 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 | 9.33 |
F-Score7
WACC10.14%
ROIC/WACC1.64
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 5Y9.33%
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%