WATSCO INC (WSO) Fundamental Analysis & Valuation
NYSE:WSO • US9426222009
Current stock price
370.31 USD
-5.61 (-1.49%)
At close:
370.31 USD
0 (0%)
After Hours:
This WSO fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.
1. WSO Profitability Analysis
1.1 Basic Checks
- WSO had positive earnings in the past year.
- In the past year WSO had a positive cash flow from operations.
- 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
- Looking at the Return On Assets, with a value of 10.47%, WSO belongs to the top of the industry, outperforming 87.23% of the companies in the same industry.
- WSO's Return On Equity of 16.62% is fine compared to the rest of the industry. WSO outperforms 76.60% of its industry peers.
- WSO's Return On Invested Capital of 14.88% is amongst the best of the industry. WSO outperforms 89.36% of its industry peers.
- WSO had an Average Return On Invested Capital over the past 3 years of 17.40%. This is significantly above the industry average of 9.00%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.47% | ||
| ROE | 16.62% | ||
| ROIC | 14.88% |
ROA(3y)11.68%
ROA(5y)12.63%
ROE(3y)19.29%
ROE(5y)21.98%
ROIC(3y)17.4%
ROIC(5y)19.52%
1.3 Margins
- The Profit Margin of WSO (6.39%) is better than 72.34% of its industry peers.
- In the last couple of years the Profit Margin of WSO has grown nicely.
- WSO has a better Operating Margin (9.57%) than 76.60% of its industry peers.
- WSO's Operating Margin has improved in the last couple of years.
- The Gross Margin of WSO (28.05%) is comparable to the rest of the industry.
- WSO's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.57% | ||
| PM (TTM) | 6.39% | ||
| GM | 28.05% |
OM growth 3Y-4.89%
OM growth 5Y4.41%
PM growth 3Y-5.33%
PM growth 5Y5.63%
GM growth 3Y0.16%
GM growth 5Y3%
2. WSO Health Analysis
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), WSO is creating value.
- Compared to 1 year ago, WSO has more shares outstanding
- The number of shares outstanding for WSO has been increased compared to 5 years ago.
- WSO has a better debt/assets ratio than last year.
2.2 Solvency
- WSO has an Altman-Z score of 8.70. This indicates that WSO is financially healthy and has little risk of bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 8.70, WSO belongs to the top of the industry, outperforming 91.49% of the companies in the same industry.
- The Debt to FCF ratio of WSO is 0.02, which is an excellent value as it means it would take WSO, only 0.02 years of fcf income to pay off all of its debts.
- Looking at the Debt to FCF ratio, with a value of 0.02, WSO belongs to the top of the industry, outperforming 95.74% of the companies in the same industry.
- A Debt/Equity ratio of 0.00 indicates that WSO is not too dependend on debt financing.
- With an excellent Debt to Equity ratio value of 0.00, WSO belongs to the best of the industry, outperforming 85.11% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.02 | ||
| Altman-Z | 8.7 |
ROIC/WACC1.66
WACC8.94%
2.3 Liquidity
- A Current Ratio of 4.12 indicates that WSO has no problem at all paying its short term obligations.
- WSO's Current ratio of 4.12 is amongst the best of the industry. WSO outperforms 93.62% of its industry peers.
- WSO has a Quick Ratio of 2.18. This indicates that WSO is financially healthy and has no problem in meeting its short term obligations.
- The Quick ratio of WSO (2.18) is better than 85.11% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.12 | ||
| Quick Ratio | 2.18 |
3. WSO Growth Analysis
3.1 Past
- WSO shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -8.57%.
- Measured over the past years, WSO shows a quite strong growth in Earnings Per Share. The EPS has been growing by 11.98% on average per year.
- Looking at the last year, WSO shows a decrease in Revenue. The Revenue has decreased by -4.98% in the last year.
- The Revenue has been growing slightly by 7.45% on average over the past years.
EPS 1Y (TTM)-8.57%
EPS 3Y-7.71%
EPS 5Y11.98%
EPS Q2Q%-29.11%
Revenue 1Y (TTM)-4.98%
Revenue growth 3Y-0.16%
Revenue growth 5Y7.45%
Sales Q2Q%-9.99%
3.2 Future
- WSO is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 19.57% yearly.
- Based on estimates for the next years, WSO will show a quite strong growth in Revenue. The Revenue will grow by 8.44% on average per year.
EPS Next Y5.54%
EPS Next 2Y7.49%
EPS Next 3Y10.94%
EPS Next 5Y19.57%
Revenue Next Year1.91%
Revenue Next 2Y3.36%
Revenue Next 3Y4.24%
Revenue Next 5Y8.44%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better 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. WSO Valuation Analysis
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 30.58, 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 25.60, WSO is valued at the same level.
- The Price/Forward Earnings ratio is 28.96, which means the current valuation is very expensive for WSO.
- WSO's Price/Forward Earnings is on the same level as the industry average.
- Compared to an average S&P500 Price/Forward Earnings ratio of 22.84, WSO is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.58 | ||
| Fwd PE | 28.96 |
4.2 Price Multiples
- WSO's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. WSO is more expensive than 61.70% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, WSO is valued a bit cheaper than the industry average as 74.47% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.08 | ||
| EV/EBITDA | 19.02 |
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)5.52
PEG (5Y)2.55
EPS Next 2Y7.49%
EPS Next 3Y10.94%
5. WSO Dividend Analysis
5.1 Amount
- WSO has a Yearly Dividend Yield of 3.19%. Purely for dividend investing, there may be better candidates out there.
- WSO's Dividend Yield is rather good when compared to the industry average which is at 0.84. WSO pays more dividend than 93.62% of the companies in the same industry.
- WSO's Dividend Yield is rather good when compared to the S&P500 average which is at 1.88.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.19% |
5.2 History
- The dividend of WSO is nicely growing with an annual growth rate of 11.59%!
- 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)11.59%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
- WSO pays out 102.49% of its income as dividend. This is not a sustainable payout ratio.
- The dividend of WSO is growing, but earnings are growing more, so the dividend growth is sustainable.
DP102.49%
EPS Next 2Y7.49%
EPS Next 3Y10.94%
WSO Fundamentals: All Metrics, Ratios and Statistics
370.31
-5.61 (-1.49%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)02-17 2026-02-17/bmo
Earnings (Next)04-16 2026-04-16
Inst Owners110.99%
Inst Owner Change4.57%
Ins Owners0.38%
Ins Owner Change0%
Market Cap15.03B
Revenue(TTM)7.24B
Net Income(TTM)462.26M
Analysts66
Price Target421.36 (13.79%)
Short Float %8.49%
Short Ratio6.46
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.19% |
Yearly Dividend10.64
Dividend Growth(5Y)11.59%
DP102.49%
Div Incr Years11
Div Non Decr Years11
Ex-Date01-16 2026-01-16 (3)
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-8.83%
Min EPS beat(2)-11.57%
Max EPS beat(2)-6.09%
EPS beat(4)0
Avg EPS beat(4)-9.91%
Min EPS beat(4)-15.33%
Max EPS beat(4)-6.09%
EPS beat(8)1
Avg EPS beat(8)-6.53%
EPS beat(12)3
Avg EPS beat(12)-4.99%
EPS beat(16)5
Avg EPS beat(16)3.47%
Revenue beat(2)0
Avg Revenue beat(2)-4.09%
Min Revenue beat(2)-4.61%
Max Revenue beat(2)-3.56%
Revenue beat(4)0
Avg Revenue beat(4)-6.28%
Min Revenue beat(4)-8.58%
Max Revenue beat(4)-3.56%
Revenue beat(8)1
Avg Revenue beat(8)-3.9%
Revenue beat(12)2
Avg Revenue beat(12)-3.56%
Revenue beat(16)3
Avg Revenue beat(16)-2.52%
PT rev (1m)0%
PT rev (3m)1.68%
EPS NQ rev (1m)-2.61%
EPS NQ rev (3m)-13.59%
EPS NY rev (1m)-2.71%
EPS NY rev (3m)-3.52%
Revenue NQ rev (1m)-1.12%
Revenue NQ rev (3m)-4.88%
Revenue NY rev (1m)-1.98%
Revenue NY rev (3m)-1.78%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.58 | ||
| Fwd PE | 28.96 | ||
| P/S | 2.08 | ||
| P/FCF | 28.08 | ||
| P/OCF | 26.38 | ||
| P/B | 5.4 | ||
| P/tB | 7.13 | ||
| EV/EBITDA | 19.02 |
EPS(TTM)12.11
EY3.27%
EPS(NY)12.79
Fwd EY3.45%
FCF(TTM)13.19
FCFY3.56%
OCF(TTM)14.04
OCFY3.79%
SpS178.4
BVpS68.54
TBVpS51.96
PEG (NY)5.52
PEG (5Y)2.55
Graham Number136.66
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.47% | ||
| ROE | 16.62% | ||
| ROCE | 18.73% | ||
| ROIC | 14.88% | ||
| ROICexc | 18.56% | ||
| ROICexgc | 24.01% | ||
| OM | 9.57% | ||
| PM (TTM) | 6.39% | ||
| GM | 28.05% | ||
| FCFM | 7.39% |
ROA(3y)11.68%
ROA(5y)12.63%
ROE(3y)19.29%
ROE(5y)21.98%
ROIC(3y)17.4%
ROIC(5y)19.52%
ROICexc(3y)20.77%
ROICexc(5y)22.06%
ROICexgc(3y)27.24%
ROICexgc(5y)29.35%
ROCE(3y)21.9%
ROCE(5y)24.57%
ROICexgc growth 3Y-11.92%
ROICexgc growth 5Y-0.32%
ROICexc growth 3Y-11.07%
ROICexc growth 5Y2.11%
OM growth 3Y-4.89%
OM growth 5Y4.41%
PM growth 3Y-5.33%
PM growth 5Y5.63%
GM growth 3Y0.16%
GM growth 5Y3%
F-Score6
Asset Turnover1.64
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.02 | ||
| Debt/EBITDA | 0.01 | ||
| Cap/Depr | 78.97% | ||
| Cap/Sales | 0.48% | ||
| Interest Coverage | 993.66 | ||
| Cash Conversion | 77.36% | ||
| Profit Quality | 115.75% | ||
| Current Ratio | 4.12 | ||
| Quick Ratio | 2.18 | ||
| Altman-Z | 8.7 |
F-Score6
WACC8.94%
ROIC/WACC1.66
Cap/Depr(3y)84.59%
Cap/Depr(5y)91.37%
Cap/Sales(3y)0.45%
Cap/Sales(5y)0.45%
Profit Quality(3y)123.21%
Profit Quality(5y)110.42%
High Growth Momentum
Growth
EPS 1Y (TTM)-8.57%
EPS 3Y-7.71%
EPS 5Y11.98%
EPS Q2Q%-29.11%
EPS Next Y5.54%
EPS Next 2Y7.49%
EPS Next 3Y10.94%
EPS Next 5Y19.57%
Revenue 1Y (TTM)-4.98%
Revenue growth 3Y-0.16%
Revenue growth 5Y7.45%
Sales Q2Q%-9.99%
Revenue Next Year1.91%
Revenue Next 2Y3.36%
Revenue Next 3Y4.24%
Revenue Next 5Y8.44%
EBIT growth 1Y-7.81%
EBIT growth 3Y-5.04%
EBIT growth 5Y12.18%
EBIT Next Year8.08%
EBIT Next 3Y9.93%
EBIT Next 5Y18.01%
FCF growth 1Y-27.99%
FCF growth 3Y-0.08%
FCF growth 5Y0.65%
OCF growth 1Y-26.32%
OCF growth 3Y-0.14%
OCF growth 5Y1.29%
WATSCO INC / WSO Fundamental Analysis FAQ
What is the fundamental rating for WSO stock?
ChartMill assigns a fundamental rating of 7 / 10 to WSO.
Can you provide the valuation status for WATSCO INC?
ChartMill assigns a valuation rating of 3 / 10 to WATSCO INC (WSO). This can be considered as Overvalued.
How profitable is WATSCO INC (WSO) stock?
WATSCO INC (WSO) has a profitability rating of 8 / 10.
Can you provide the financial health for WSO stock?
The financial health rating of WATSCO INC (WSO) is 9 / 10.
Can you provide the expected EPS growth for WSO stock?
The Earnings per Share (EPS) of WATSCO INC (WSO) is expected to grow by 5.54% in the next year.