WATSCO INC (WSO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:WSO - US9426222009 - Common Stock
347.78 USD
+2.02 (+0.58%)
347.78 USD
0 (0%)
We assign a fundamental rating of 7 out of 10 to WSO. WSO was compared to 50 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. While showing a medium growth rate, WSO is valued expensive at the moment. Finally WSO also has an excellent dividend rating. With these ratings, WSO could be worth investigating further for dividend and 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.
WSO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 10.66%, WSO belongs to the best of the industry, outperforming 84.00% of the companies in the same industry.
WSO has a Return On Equity of 17.24%. This is in the better half of the industry: WSO outperforms 72.00% of its industry peers.
WSO's Return On Invested Capital of 15.48% is amongst the best of the industry. WSO outperforms 92.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for WSO is significantly above the industry average of 9.63%.
The 3 year average ROIC (20.81%) for WSO is well above the current ROIC(15.48%). The reason for the recent decline needs to be investigated.
| 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
WSO's Profit Margin of 6.55% is fine compared to the rest of the industry. WSO outperforms 70.00% of its industry peers.
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 70.00% of its industry peers.
In the last couple of years the Operating Margin of WSO has grown nicely.
WSO's Gross Margin of 27.92% is in line compared to the rest of the industry. WSO outperforms 46.00% of its industry peers.
WSO's Gross Margin has improved in the last couple of years.
| 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
WSO has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it 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.
The debt/assets ratio for WSO has been reduced compared to a year ago.
2.2 Solvency
WSO has an Altman-Z score of 8.05. This indicates that WSO is financially healthy and has little risk of bankruptcy at the moment.
WSO has a better Altman-Z score (8.05) than 88.00% of its industry peers.
WSO 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.
WSO has a better Debt to FCF ratio (0.02) than 92.00% of its industry peers.
WSO has a Debt/Equity ratio of 0.00. This is a healthy value indicating a solid balance between debt and equity.
WSO has a Debt to Equity ratio of 0.00. This is amongst the best in the industry. WSO outperforms 86.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.02 | ||
| Altman-Z | 8.05 |
ROIC/WACC1.59
WACC9.75%
2.3 Liquidity
A Current Ratio of 3.84 indicates that WSO has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 3.84, WSO belongs to the top of the industry, outperforming 88.00% of the companies in the same industry.
A Quick Ratio of 1.86 indicates that WSO should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.86, WSO is in the better half of the industry, outperforming 72.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.84 | ||
| Quick Ratio | 1.86 |
3. Growth
3.1 Past
The earnings per share for WSO have decreased by -1.05% in the last year.
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.
Looking at the last year, WSO shows a decrease in Revenue. The Revenue has decreased by -0.71% in the last year.
WSO shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.81% yearly.
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-6.04%
EPS Next 2Y0.29%
EPS Next 3Y3.15%
EPS Next 5Y11.57%
Revenue Next Year-3.47%
Revenue Next 2Y0.3%
Revenue Next 3Y1.8%
Revenue Next 5Y8.19%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past 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
The Price/Earnings ratio is 27.17, which means the current valuation is very expensive for WSO.
WSO's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 26.59. WSO is around the same levels.
With a Price/Forward Earnings ratio of 26.10, WSO can be considered very expensive at the moment.
WSO's Price/Forward Earnings is on the same level as the industry average.
WSO's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.03.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.17 | ||
| Fwd PE | 26.1 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WSO is valued a bit more expensive than the industry average as 60.00% of the companies are valued more cheaply.
Based on the Price/Free Cash Flow ratio, WSO is valued a bit cheaper than the industry average as 66.00% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.26 | ||
| EV/EBITDA | 17.56 |
4.3 Compensation for Growth
WSO has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.73
EPS Next 2Y0.29%
EPS Next 3Y3.15%
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 0.98, WSO pays a better dividend. On top of this WSO pays more dividend than 90.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 1.88, WSO pays a better dividend.
| 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 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 pays out 95.01% 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.
DP95.01%
EPS Next 2Y0.29%
EPS Next 3Y3.15%
347.78
+2.02 (+0.58%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners112.32%
Inst Owner Change3.13%
Ins Owners0.38%
Ins Owner Change0%
Market Cap14.11B
Revenue(TTM)7.41B
Net Income(TTM)485.36M
Analysts66
Price TargetN/A
Short Float %9.16%
Short Ratio6.55
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.26% |
Yearly Dividend9.55
Dividend Growth(5Y)11.05%
DP95.01%
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)-5.48%
PT rev (3m)-12.78%
EPS NQ rev (1m)-1.72%
EPS NQ rev (3m)-24.36%
EPS NY rev (1m)-2.25%
EPS NY rev (3m)-10.14%
Revenue NQ rev (1m)-0.49%
Revenue NQ rev (3m)-8.23%
Revenue NY rev (1m)-1.06%
Revenue NY rev (3m)-4.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.17 | ||
| Fwd PE | 26.1 | ||
| P/S | 1.9 | ||
| P/FCF | 27.26 | ||
| P/OCF | 25.71 | ||
| P/B | 5.01 | ||
| P/tB | 6.58 | ||
| EV/EBITDA | 17.56 |
EPS(TTM)12.8
EY3.68%
EPS(NY)13.33
Fwd EY3.83%
FCF(TTM)12.76
FCFY3.67%
OCF(TTM)13.53
OCFY3.89%
SpS182.8
BVpS69.4
TBVpS52.83
PEG (NY)N/A
PEG (5Y)1.73
Graham Number141.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.66% | ||
| ROE | 17.24% | ||
| ROCE | 19.41% | ||
| ROIC | 15.48% | ||
| ROICexc | 18% | ||
| ROICexgc | 22.75% | ||
| 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 | 0.02 | ||
| Debt/EBITDA | 0.02 | ||
| Cap/Depr | 72.48% | ||
| Cap/Sales | 0.42% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 71.31% | ||
| Profit Quality | 106.61% | ||
| Current Ratio | 3.84 | ||
| Quick Ratio | 1.86 | ||
| Altman-Z | 8.05 |
F-Score6
WACC9.75%
ROIC/WACC1.59
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-6.04%
EPS Next 2Y0.29%
EPS Next 3Y3.15%
EPS Next 5Y11.57%
Revenue 1Y (TTM)-0.71%
Revenue growth 3Y6.65%
Revenue growth 5Y9.81%
Sales Q2Q%-4.31%
Revenue Next Year-3.47%
Revenue Next 2Y0.3%
Revenue Next 3Y1.8%
Revenue Next 5Y8.19%
EBIT growth 1Y0.38%
EBIT growth 3Y7.24%
EBIT growth 5Y16.07%
EBIT Next Year-0.44%
EBIT Next 3Y6.2%
EBIT Next 5Y10.74%
FCF growth 1Y17.12%
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 7 / 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 -6.04% in the next year.
How sustainable is the dividend of WATSCO INC (WSO) stock?
The dividend rating of WATSCO INC (WSO) is 7 / 10 and the dividend payout ratio is 95.01%.