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I’ve been keeping an eye on Watsco, Inc. (NYSE:WSO) because I’m attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe WSO has a lot to offer. Basically, it is a financially-robust , dividend-paying company with a strong history of performance. Below, I’ve touched on some key aspects you should know on a high level. If you’re interested in understanding beyond my broad commentary, read the full report on Watsco here.
Flawless balance sheet with proven track record and pays a dividend
Over the past year, WSO has grown its earnings by 12%, with its most recent figure exceeding its annual average over the past five years. Not only did WSO outperformed its past performance, its growth also surpassed the Trade Distributors industry expansion, which generated a -7.0% earnings growth. This is an optimistic signal for the future. WSO’s strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This indicates that WSO has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. WSO appears to have made good use of debt, producing operating cash levels of 1.86x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
WSO’s reputation for being one of the best dividend payers in the market is supported by the fact that it has been steadily growing its dividend payments over the past ten years and currently is one of the top yielding companies on the markets, at 3.9%.
Next Steps:
For Watsco, I’ve put together three essential factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for WSO’s future growth? Take a look at our free research report of analyst consensus for WSO’s outlook.
- Valuation: What is WSO worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether WSO is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of WSO? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.