WATSCO INC (WSO) Stock Fundamental Analysis
NYSE:WSO • US9426222009
407.82 USD
-4.31 (-1.05%)
At close: Feb 25, 2026
407.82 USD
0 (0%)
After Hours: 2/25/2026, 8:04:00 PM
WSO gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 50 industry peers in the Trading Companies & Distributors industry. WSO has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. WSO is valued expensive and it does not seem to be growing. Finally WSO also has an excellent dividend rating. This makes WSO very considerable for dividend 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.
- In the past 5 years WSO has always been profitable.
- Each year in the past 5 years WSO had a positive operating cash flow.
1.2 Ratios
- WSO's Return On Assets of 10.40% is amongst the best of the industry. WSO outperforms 84.00% of its industry peers.
- WSO has a Return On Equity of 16.50%. This is in the better half of the industry: WSO outperforms 72.00% of its industry peers.
- WSO has a better Return On Invested Capital (14.88%) than 90.00% 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 9.42%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.4% | ||
| ROE | 16.5% | ||
| 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
- Looking at the Profit Margin, with a value of 6.34%, WSO is in the better half of the industry, outperforming 70.00% 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 9.57%. 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 28.05% is in line compared to the rest of the industry. WSO outperforms 46.00% of its industry peers.
- In the last couple of years the Gross Margin of WSO has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.57% | ||
| PM (TTM) | 6.34% | ||
| 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. 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 reduced compared to 1 year ago.
- The number of shares outstanding for WSO has been reduced compared to 5 years ago.
- WSO has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
- WSO has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | N/A |
ROIC/WACC1.55
WACC9.57%
2.3 Liquidity
- WSO has a Current Ratio of 4.12. This indicates that WSO is financially healthy and has no problem in meeting its short term obligations.
- WSO has a Current ratio of 4.12. This is amongst the best in the industry. WSO outperforms 88.00% of its industry peers.
- A Quick Ratio of 2.18 indicates that WSO has no problem at all paying its short term obligations.
- WSO's Quick ratio of 2.18 is fine compared to the rest of the industry. WSO outperforms 80.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.12 | ||
| Quick Ratio | 2.18 |
3. Growth
3.1 Past
- The earnings per share for WSO have decreased by -8.57% 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 11.98% yearly.
- The Revenue has decreased by -4.98% in the past 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
- Based on estimates for the next years, WSO will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.30% on average per year.
- Based on estimates for the next years, WSO will show a small growth in Revenue. The Revenue will grow by 5.55% on average per year.
EPS Next Y8.48%
EPS Next 2Y8.37%
EPS Next 3Y12.88%
EPS Next 5Y14.3%
Revenue Next Year3.96%
Revenue Next 2Y4.87%
Revenue Next 3Y4.82%
Revenue Next 5Y5.55%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- WSO is valuated quite expensively with a Price/Earnings ratio of 33.68.
- Compared to the rest of the industry, the Price/Earnings ratio of WSO is on the same level as its industry peers.
- WSO's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 27.05.
- With a Price/Forward Earnings ratio of 31.03, WSO can be considered very expensive at the moment.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of WSO is on the same level as its industry peers.
- Compared to an average S&P500 Price/Forward Earnings ratio of 28.03, WSO is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.68 | ||
| Fwd PE | 31.03 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, WSO is valued a bit more expensive than the industry average as 64.00% of the companies are valued more cheaply.
- WSO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. WSO is cheaper than 68.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.89 | ||
| EV/EBITDA | 21.3 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The excellent profitability rating of WSO may justify a higher PE ratio.
- WSO's earnings are expected to grow with 12.88% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.97
PEG (5Y)2.81
EPS Next 2Y8.37%
EPS Next 3Y12.88%
5. Dividend
5.1 Amount
- WSO has a Yearly Dividend Yield of 3.19%.
- WSO's Dividend Yield is rather good when compared to the industry average which is at 1.11. WSO pays more dividend than 90.00% of the companies in the same industry.
- WSO's Dividend Yield is rather good when compared to the S&P500 average which is at 1.80.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.19% |
5.2 History
- On average, the dividend of WSO grows each year by 12.64%, which is quite nice.
- WSO has paid a dividend for at least 10 years, which is 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)12.64%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
- 103.23% of the earnings are spent on dividend by WSO. 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.
DP103.23%
EPS Next 2Y8.37%
EPS Next 3Y12.88%
407.82
-4.31 (-1.05%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)02-17 2026-02-17/bmo
Earnings (Next)04-21 2026-04-21
Inst Owners112.05%
Inst Owner Change4.52%
Ins Owners0.38%
Ins Owner Change0%
Market Cap16.54B
Revenue(TTM)7.24B
Net Income(TTM)458.95M
Analysts66
Price Target421.36 (3.32%)
Short Float %9.97%
Short Ratio8.02
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.19% |
Yearly Dividend11.15
Dividend Growth(5Y)12.64%
DP103.23%
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)-1.12%
PT rev (3m)-3.24%
EPS NQ rev (1m)-0.24%
EPS NQ rev (3m)-0.98%
EPS NY rev (1m)0%
EPS NY rev (3m)-2.22%
Revenue NQ rev (1m)-0.12%
Revenue NQ rev (3m)-0.67%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)-1.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.68 | ||
| Fwd PE | 31.03 | ||
| P/S | 2.28 | ||
| P/FCF | 30.89 | ||
| P/OCF | 29.04 | ||
| P/B | 5.95 | ||
| P/tB | 8.66 | ||
| EV/EBITDA | 21.3 |
EPS(TTM)12.11
EY2.97%
EPS(NY)13.14
Fwd EY3.22%
FCF(TTM)13.2
FCFY3.24%
OCF(TTM)14.04
OCFY3.44%
SpS178.48
BVpS68.57
TBVpS47.08
PEG (NY)3.97
PEG (5Y)2.81
Graham Number136.69
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.4% | ||
| ROE | 16.5% | ||
| ROCE | 18.73% | ||
| ROIC | 14.88% | ||
| ROICexc | 18.56% | ||
| ROICexgc | 26.3% | ||
| OM | 9.57% | ||
| PM (TTM) | 6.34% | ||
| GM | 28.05% | ||
| FCFM | 7.4% |
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)28%
ROICexgc(5y)29.8%
ROCE(3y)21.9%
ROCE(5y)24.57%
ROICexgc growth 3Y-9.21%
ROICexgc growth 5Y1.51%
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 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 77.92% | ||
| Cap/Sales | 0.47% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 77.36% | ||
| Profit Quality | 116.68% | ||
| Current Ratio | 4.12 | ||
| Quick Ratio | 2.18 | ||
| Altman-Z | N/A |
F-Score6
WACC9.57%
ROIC/WACC1.55
Cap/Depr(3y)84.25%
Cap/Depr(5y)91.16%
Cap/Sales(3y)0.45%
Cap/Sales(5y)0.45%
Profit Quality(3y)123.24%
Profit Quality(5y)110.44%
High Growth Momentum
Growth
EPS 1Y (TTM)-8.57%
EPS 3Y-7.71%
EPS 5Y11.98%
EPS Q2Q%-29.11%
EPS Next Y8.48%
EPS Next 2Y8.37%
EPS Next 3Y12.88%
EPS Next 5Y14.3%
Revenue 1Y (TTM)-4.98%
Revenue growth 3Y-0.16%
Revenue growth 5Y7.45%
Sales Q2Q%-9.99%
Revenue Next Year3.96%
Revenue Next 2Y4.87%
Revenue Next 3Y4.82%
Revenue Next 5Y5.55%
EBIT growth 1Y-7.81%
EBIT growth 3Y-5.04%
EBIT growth 5Y12.18%
EBIT Next Year9.21%
EBIT Next 3Y9.93%
EBIT Next 5Y20.39%
FCF growth 1Y-27.93%
FCF growth 3Y-0.05%
FCF growth 5Y0.67%
OCF growth 1Y-26.32%
OCF growth 3Y-0.14%
OCF growth 5Y1.29%
WATSCO INC / WSO FAQ
What is the fundamental rating for WSO stock?
ChartMill assigns a fundamental rating of 6 / 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.
What is the profitability of WSO stock?
WATSCO INC (WSO) has a profitability rating of 8 / 10.
What is the financial health of WATSCO INC (WSO) stock?
The financial health rating of WATSCO INC (WSO) is 8 / 10.
Is the dividend of WATSCO INC sustainable?
The dividend rating of WATSCO INC (WSO) is 7 / 10 and the dividend payout ratio is 103.23%.