WATSCO INC (WSO)
US9426222009 - Common Stock
WSO gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 51 industry peers in the Trading Companies & Distributors industry. While WSO has a great profitability rating, there are some minor concerns on its financial health. WSO has a expensive valuation and it also scores bad on growth.
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.
WSO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
WSO has a Return On Assets of 10.94%. This is amongst the best in the industry. WSO outperforms 80.39% of its industry peers.
WSO's Return On Equity of 18.87% is in line compared to the rest of the industry. WSO outperforms 56.86% of its industry peers.
WSO has a Return On Invested Capital of 18.06%. This is amongst the best in the industry. WSO outperforms 86.27% of its industry peers.
WSO had an Average Return On Invested Capital over the past 3 years of 22.74%. This is significantly above the industry average of 11.53%.
The last Return On Invested Capital (18.06%) for WSO is well below the 3 year average (22.74%), which needs to be investigated, but indicates that WSO had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.94% | ||
| ROE | 18.87% | ||
| ROIC | 18.06% |
ROA(3y)13.84%
ROA(5y)12.05%
ROE(3y)24.81%
ROE(5y)21.34%
ROIC(3y)22.74%
ROIC(5y)19.68%
1.3 Margins
With a Profit Margin value of 6.53%, WSO perfoms like the industry average, outperforming 58.82% of the companies in the same industry.
WSO's Profit Margin has improved in the last couple of years.
WSO's Operating Margin of 9.98% is fine compared to the rest of the industry. WSO outperforms 60.78% of its industry peers.
WSO's Operating Margin has improved in the last couple of years.
WSO's Gross Margin of 27.06% is on the low side compared to the rest of the industry. WSO is outperformed by 60.78% of its industry peers.
In the last couple of years the Gross Margin of WSO has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.98% | ||
| PM (TTM) | 6.53% | ||
| GM | 27.06% |
OM growth 3Y11.03%
OM growth 5Y5.75%
PM growth 3Y12.04%
PM growth 5Y6.92%
GM growth 3Y4.18%
GM growth 5Y2.11%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), WSO is creating value.
The number of shares outstanding for WSO has been increased compared to 1 year ago.
WSO has more shares outstanding than it did 5 years ago.
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 | 0.15 | ||
| Altman-Z | N/A |
ROIC/WACC1.97
WACC9.17%
2.3 Liquidity
WSO has a Current Ratio of 2.92. This indicates that WSO is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of WSO (2.92) is better than 72.55% of its industry peers.
WSO has a Quick Ratio of 1.31. 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 1.31. This is comparable to the rest of the industry: WSO outperforms 54.90% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.92 | ||
| Quick Ratio | 1.31 |
3. Growth
3.1 Past
The earnings per share for WSO have decreased strongly by -15.25% in the last year.
WSO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 16.30% yearly.
Looking at the last year, WSO shows a decrease in Revenue. The Revenue has decreased by -0.05% in the last year.
WSO shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.88% yearly.
EPS 1Y (TTM)-15.25%
EPS 3Y25.69%
EPS 5Y16.3%
EPS growth Q2Q-23.32%
Revenue 1Y (TTM)-0.05%
Revenue growth 3Y12.95%
Revenue growth 5Y9.88%
Revenue growth Q2Q0.93%
3.2 Future
Based on estimates for the next years, WSO will show a small growth in Earnings Per Share. The EPS will grow by 6.79% on average per year.
The Revenue is expected to grow by 7.66% on average over the next years.
EPS Next Y6.46%
EPS Next 2Y9.46%
EPS Next 3Y9.64%
EPS Next 5Y6.79%
Revenue Next Year6.03%
Revenue Next 2Y6.5%
Revenue Next 3Y6.57%
Revenue Next 5Y7.66%
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
WSO is valuated quite expensively with a Price/Earnings ratio of 36.05.
Compared to the rest of the industry, the Price/Earnings ratio of WSO indicates a slightly more expensive valuation: WSO is more expensive than 68.63% of the companies listed in the same industry.
WSO's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 28.05.
WSO is valuated quite expensively with a Price/Forward Earnings ratio of 28.64.
Based on the Price/Forward Earnings ratio, WSO is valued a bit more expensive than the industry average as 70.59% of the companies are valued more cheaply.
WSO is valuated rather expensively when we compare the Price/Forward Earnings ratio to 20.30, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.05 | ||
| Fwd PE | 28.64 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WSO is valued a bit more expensive than 78.43% of the companies in the same industry.
WSO's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.64 | ||
| EV/EBITDA | 27.29 |
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 has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)5.58
PEG (5Y)2.21
EPS Next 2Y9.46%
EPS Next 3Y9.64%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.37%, WSO has a reasonable but not impressive dividend return.
WSO's Dividend Yield is rather good when compared to the industry average which is at 1.73. WSO pays more dividend than 94.12% of the companies in the same industry.
WSO's Dividend Yield is comparable with the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.37% |
5.2 History
On average, the dividend of WSO grows each year by 11.93%, which is quite nice.
WSO has been paying a dividend for at least 10 years, so it has a reliable track record.
WSO has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)11.93%
Div Incr Years10
Div Non Decr Years10
5.3 Sustainability
WSO pays out 80.62% of its income as dividend. This is not a sustainable payout ratio.
The dividend of WSO is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP80.62%
EPS Next 2Y9.46%
EPS Next 3Y9.64%
WATSCO INC
NYSE:WSO (5/8/2024, 7:27:31 PM)
After market: 468.69 0 (0%)468.69
+0.7 (+0.15%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap21.49B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.37% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
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Min EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.05 | ||
| Fwd PE | 28.64 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)5.58
PEG (5Y)2.21
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.94% | ||
| ROE | 18.87% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 9.98% | ||
| PM (TTM) | 6.53% | ||
| GM | 27.06% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.67
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.92 | ||
| Quick Ratio | 1.31 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-15.25%
EPS 3Y25.69%
EPS 5Y
EPS growth Q2Q
EPS Next Y6.46%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-0.05%
Revenue growth 3Y12.95%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y