WATSCO INC (WSO) Stock Fundamental Analysis
USA - NYSE:WSO - US9426222009 - Common Stock
351.64 USD
+0.51 (+0.15%)
351.64 USD
0 (0%)
Taking everything into account, WSO scores 6 out of 10 in our fundamental rating. WSO was compared to 51 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. This makes WSO very considerable for quality investing!
1. Profitability
1.1 Basic Checks
In the past year WSO was profitable.
WSO had a positive operating cash flow in the past year.
Each year in the past 5 years WSO has been profitable.
Each year in the past 5 years WSO had a positive operating cash flow.
1.2 Ratios
The Return On Assets of WSO (10.66%) is better than 86.27% of its industry peers.
The Return On Equity of WSO (17.24%) is better than 72.55% of its industry peers.
WSO's Return On Invested Capital of 15.48% is amongst the best of the industry. WSO outperforms 90.20% of its industry peers.
WSO had an Average Return On Invested Capital over the past 3 years of 20.81%. This is significantly above the industry average of 10.19%.
The last Return On Invested Capital (15.48%) for WSO is well below the 3 year average (20.81%), which needs to be investigated, but indicates that WSO had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.66% | ||
| ROE | 17.24% | ||
| ROIC | 15.48% |
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
With a decent Profit Margin value of 6.55%, WSO is doing good in the industry, outperforming 72.55% of the companies in the same industry.
In the last couple of years the Profit Margin of WSO has grown nicely.
WSO has a Operating Margin of 9.80%. This is in the better half of the industry: WSO outperforms 72.55% of its industry peers.
WSO's Operating Margin has improved in the last couple of years.
With a Gross Margin value of 27.92%, WSO perfoms like the industry average, outperforming 47.06% of the companies in the same industry.
In the last couple of years the Gross Margin of WSO has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.8% | ||
| PM (TTM) | 6.55% | ||
| GM | 27.92% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so WSO is creating value.
WSO has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, WSO has more shares outstanding
Compared to 1 year ago, WSO has an improved debt to assets ratio.
2.2 Solvency
There is no outstanding debt for WSO. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.23 | ||
| Altman-Z | N/A |
ROIC/WACC1.65
WACC9.36%
2.3 Liquidity
A Current Ratio of 3.84 indicates that WSO has no problem at all paying its short term obligations.
WSO's Current ratio of 3.84 is amongst the best of the industry. WSO outperforms 86.27% of its industry peers.
WSO has a Quick Ratio of 1.86. This is a normal value and indicates that WSO is financially healthy and should not expect problems in meeting its short term obligations.
WSO has a Quick ratio of 1.86. This is in the better half of the industry: WSO outperforms 72.55% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.84 | ||
| Quick Ratio | 1.86 |
3. Growth
3.1 Past
WSO shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -1.05%.
Measured over the past years, WSO shows a quite strong growth in Earnings Per Share. The EPS has been growing by 15.67% on average per year.
WSO shows a decrease in Revenue. In the last year, the revenue decreased by -0.71%.
The Revenue has been growing by 9.81% on average over the past years. This is quite good.
EPS 1Y (TTM)-1.05%
EPS 3Y7.25%
EPS 5Y15.67%
EPS Q2Q%-5.69%
Revenue 1Y (TTM)-0.71%
Revenue growth 3Y6.65%
Revenue growth 5Y9.81%
Sales Q2Q%-4.31%
3.2 Future
The Earnings Per Share is expected to grow by 11.57% on average over the next years. This is quite good.
WSO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.19% yearly.
EPS Next Y-3.88%
EPS Next 2Y1.89%
EPS Next 3Y4.64%
EPS Next 5Y11.57%
Revenue Next Year-2.43%
Revenue Next 2Y1.25%
Revenue Next 3Y2.49%
Revenue Next 5Y8.19%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
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
Based on the Price/Earnings ratio of 27.47, the valuation of WSO can be described as expensive.
WSO's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 26.06, WSO is valued at the same level.
The Price/Forward Earnings ratio is 25.56, which means the current valuation is very expensive for WSO.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WSO is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of WSO to the average of the S&P500 Index (32.73), we can say WSO is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.47 | ||
| Fwd PE | 25.56 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WSO is valued a bit more expensive than the industry average as 64.71% of the companies are valued more cheaply.
Based on the Price/Free Cash Flow ratio, WSO is valued a bit cheaper than 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.54 | ||
| EV/EBITDA | 17.74 |
4.3 Compensation for Growth
The excellent profitability rating of WSO may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.75
EPS Next 2Y1.89%
EPS Next 3Y4.64%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.26%, WSO has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.20, WSO pays a better dividend. On top of this WSO pays more dividend than 92.16% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.37, WSO pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.26% |
5.2 History
The dividend of WSO is nicely growing with an annual growth rate of 11.05%!
WSO has been paying a dividend for at least 10 years, so it has a reliable track record.
WSO 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 pays out 95.00% of its income as dividend. This is not a sustainable payout ratio.
The dividend of WSO is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP95%
EPS Next 2Y1.89%
EPS Next 3Y4.64%
351.64
+0.51 (+0.15%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners104.41%
Inst Owner Change-0.87%
Ins Owners0.38%
Ins Owner Change0%
Market Cap14.26B
Revenue(TTM)7.41B
Net Income(TTM)485.37M
Analysts65.71
Price Target441.78 (25.63%)
Short Float %7.69%
Short Ratio5.6
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.26% |
Yearly Dividend9.55
Dividend Growth(5Y)11.05%
DP95%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-6.38%
Min EPS beat(2)-6.66%
Max EPS beat(2)-6.09%
EPS beat(4)1
Avg EPS beat(4)-4.57%
Min EPS beat(4)-15.33%
Max EPS beat(4)9.8%
EPS beat(8)1
Avg EPS beat(8)-7.02%
EPS beat(12)4
Avg EPS beat(12)1.45%
EPS beat(16)6
Avg EPS beat(16)5.32%
Revenue beat(2)0
Avg Revenue beat(2)-6.6%
Min Revenue beat(2)-8.58%
Max Revenue beat(2)-4.61%
Revenue beat(4)1
Avg Revenue beat(4)-4.31%
Min Revenue beat(4)-8.58%
Max Revenue beat(4)4.34%
Revenue beat(8)1
Avg Revenue beat(8)-3.93%
Revenue beat(12)2
Avg Revenue beat(12)-3.5%
Revenue beat(16)4
Avg Revenue beat(16)-1.61%
PT rev (1m)-6.44%
PT rev (3m)-8.7%
EPS NQ rev (1m)-22.77%
EPS NQ rev (3m)-25.14%
EPS NY rev (1m)-7.36%
EPS NY rev (3m)-12.21%
Revenue NQ rev (1m)-6.78%
Revenue NQ rev (3m)-8.83%
Revenue NY rev (1m)-2.55%
Revenue NY rev (3m)-7.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.47 | ||
| Fwd PE | 25.56 | ||
| P/S | 1.92 | ||
| P/FCF | 27.54 | ||
| P/OCF | 25.98 | ||
| P/B | 5.07 | ||
| P/tB | 7.34 | ||
| EV/EBITDA | 17.74 |
EPS(TTM)12.8
EY3.64%
EPS(NY)13.76
Fwd EY3.91%
FCF(TTM)12.77
FCFY3.63%
OCF(TTM)13.53
OCFY3.85%
SpS182.85
BVpS69.42
TBVpS47.89
PEG (NY)N/A
PEG (5Y)1.75
Graham Number141.39
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.66% | ||
| ROE | 17.24% | ||
| ROCE | 19.41% | ||
| ROIC | 15.48% | ||
| ROICexc | 18% | ||
| ROICexgc | 24.7% | ||
| OM | 9.8% | ||
| PM (TTM) | 6.55% | ||
| GM | 27.92% | ||
| FCFM | 6.98% |
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%
ROICexgc growth 3Y-0.91%
ROICexgc 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-Score6
Asset Turnover1.63
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.23 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 71.62% | ||
| Cap/Sales | 0.42% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 71.31% | ||
| Profit Quality | 106.69% | ||
| Current Ratio | 3.84 | ||
| Quick Ratio | 1.86 | ||
| Altman-Z | N/A |
F-Score6
WACC9.36%
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)-1.05%
EPS 3Y7.25%
EPS 5Y15.67%
EPS Q2Q%-5.69%
EPS Next Y-3.88%
EPS Next 2Y1.89%
EPS Next 3Y4.64%
EPS Next 5Y11.57%
Revenue 1Y (TTM)-0.71%
Revenue growth 3Y6.65%
Revenue growth 5Y9.81%
Sales Q2Q%-4.31%
Revenue Next Year-2.43%
Revenue Next 2Y1.25%
Revenue Next 3Y2.49%
Revenue Next 5Y8.19%
EBIT growth 1Y0.38%
EBIT growth 3Y7.24%
EBIT growth 5Y16.07%
EBIT Next Year9.21%
EBIT Next 3Y10.63%
EBIT Next 5Y10.74%
FCF growth 1Y17.21%
FCF growth 3Y31.86%
FCF growth 5Y18.5%
OCF growth 1Y15.18%
OCF growth 3Y30.29%
OCF growth 5Y18.15%
WATSCO INC / WSO FAQ
What is the fundamental rating for WSO stock?
ChartMill assigns a fundamental rating of 6 / 10 to WSO.
What is the valuation status for WSO stock?
ChartMill assigns a valuation rating of 3 / 10 to WATSCO INC (WSO). This can be considered as Overvalued.
What is the profitability of WSO stock?
WATSCO INC (WSO) has a profitability rating of 8 / 10.
What is the earnings growth outlook for WATSCO INC?
The Earnings per Share (EPS) of WATSCO INC (WSO) is expected to decline by -3.88% in the next year.
How sustainable is the dividend of WATSCO INC (WSO) stock?
The dividend rating of WATSCO INC (WSO) is 6 / 10 and the dividend payout ratio is 95%.