Watsco, Inc., together with its subsidiaries, distributes air conditioning, heating, and refrigeration equipment; and related parts and supplies in the United States, Canada, Mexico, and Puerto Rico.
Price History & Performance
|Historical stock prices|
|Current Share Price||US$287.35|
|52 Week High||US$216.25|
|52 Week Low||US$307.81|
|1 Month Change||3.52%|
|3 Month Change||4.12%|
|1 Year Change||26.58%|
|3 Year Change||103.10%|
|5 Year Change||112.81%|
|Change since IPO||10,908.61%|
Recent News & Updates
Estimating The Fair Value Of Watsco, Inc. (NYSE:WSO)
In this article we are going to estimate the intrinsic value of Watsco, Inc. ( NYSE:WSO ) by taking the forecast future...
Watsco Continues To Execute Very Well, But End-Market Demand And Valuation Are Concerns
Watsco has benefited from strong demand in residential HVAC, but the pace of that ongoing growth is very much up for debate, with tougher comps and moderating renovation/replacement activity. Management has successfully executed on a tuck-in M&A strategy for decades and that isn't stopping. Watsco has also been delivering meaningful benefits from a digitalization strategy that increases customer loyalty, reduces operating costs, and gives management useful actionable data. High-single-digit FCF growth and solid returns (ROIC, ROTA, et al) aren't enough to support a meaningfully higher fair value today.
Watsco (NYSE:WSO) Seems To Use Debt Rather Sparingly
Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously...
Investors Shouldn't Overlook The Favourable Returns On Capital At Watsco (NYSE:WSO)
There are a few key trends to look for if we want to identify the next multi-bagger. Ideally, a business will show two...
|WSO||US Trade Distributors||US Market|
Return vs Industry: WSO underperformed the US Trade Distributors industry which returned 57.6% over the past year.
Return vs Market: WSO underperformed the US Market which returned 33.4% over the past year.
Stable Share Price: WSO is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 2% a week.
Volatility Over Time: WSO's weekly volatility (2%) has been stable over the past year.
About the Company
Watsco, Inc., together with its subsidiaries, distributes air conditioning, heating, and refrigeration equipment; and related parts and supplies in the United States, Canada, Mexico, and Puerto Rico. It offers residential ducted and ductless air conditioners, including gas, electric, and oil furnaces; commercial air conditioning and heating equipment systems; and other specialized equipment. The company also provides parts comprising replacement compressors, evaporator coils, motors, and other component parts; and supplies, such as thermostats, insulation materials, refrigerants, ductworks, grills, registers, sheet metals, tools, copper tubing, concrete pads, tapes, adhesives, and other ancillary supplies, as well as plumbing and bathroom remodeling supplies.
Watsco Fundamentals Summary
|WSO fundamental statistics|
Is WSO overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|WSO income statement (TTM)|
|Cost of Revenue||US$4.39b|
Last Reported Earnings
Sep 30, 2021
Next Earnings Date
|Earnings per share (EPS)||10.25|
|Net Profit Margin||6.13%|
How did WSO perform over the long term?See historical performance and comparison
2.7%Current Dividend Yield
Is Watsco undervalued compared to its fair value and its price relative to the market?
Price to Earnings (PE) ratio
Share Price vs. Fair Value
Below Fair Value: WSO ($287.35) is trading above our estimate of fair value ($280.97)
Significantly Below Fair Value: WSO is trading above our estimate of fair value.
Price To Earnings Ratio
PE vs Industry: WSO is poor value based on its PE Ratio (28x) compared to the US Trade Distributors industry average (22.1x).
PE vs Market: WSO is poor value based on its PE Ratio (28x) compared to the US market (18.3x).
Price to Earnings Growth Ratio
PEG Ratio: WSO is poor value based on its PEG Ratio (10.2x)
Price to Book Ratio
PB vs Industry: WSO is overvalued based on its PB Ratio (6.2x) compared to the US Trade Distributors industry average (2.4x).
How is Watsco forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: WSO's forecast earnings growth (2.7% per year) is above the savings rate (2%).
Earnings vs Market: WSO's earnings (2.7% per year) are forecast to grow slower than the US market (14.7% per year).
High Growth Earnings: WSO's earnings are forecast to grow, but not significantly.
Revenue vs Market: WSO's revenue (3.4% per year) is forecast to grow slower than the US market (9.9% per year).
High Growth Revenue: WSO's revenue (3.4% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: WSO's Return on Equity is forecast to be high in 3 years time (20.6%)
How has Watsco performed over the past 5 years?
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: WSO has high quality earnings.
Growing Profit Margin: WSO's current net profit margins (6.1%) are higher than last year (4.8%).
Past Earnings Growth Analysis
Earnings Trend: WSO's earnings have grown by 12.3% per year over the past 5 years.
Accelerating Growth: WSO's earnings growth over the past year (52.8%) exceeds its 5-year average (12.3% per year).
Earnings vs Industry: WSO earnings growth over the past year (52.8%) underperformed the Trade Distributors industry 52.8%.
Return on Equity
High ROE: WSO's Return on Equity (22.7%) is considered high.
How is Watsco's financial position?
Financial Position Analysis
Short Term Liabilities: WSO's short term assets ($2.0B) exceed its short term liabilities ($796.7M).
Long Term Liabilities: WSO's short term assets ($2.0B) exceed its long term liabilities ($272.7M).
Debt to Equity History and Analysis
Debt Level: WSO's debt to equity ratio (0.09%) is considered satisfactory.
Reducing Debt: WSO's debt to equity ratio has reduced from 16.9% to 0.09% over the past 5 years.
Debt Coverage: WSO's debt is well covered by operating cash flow (27916.1%).
Interest Coverage: WSO's interest payments on its debt are well covered by EBIT (692.6x coverage).
What is Watsco current dividend yield, its reliability and sustainability?
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: WSO's dividend (2.71%) is higher than the bottom 25% of dividend payers in the US market (1.27%).
High Dividend: WSO's dividend (2.71%) is low compared to the top 25% of dividend payers in the US market (3.48%).
Stability and Growth of Payments
Stable Dividend: WSO's dividend payments have been volatile in the past 10 years.
Growing Dividend: WSO's dividend payments have increased over the past 10 years.
Current Payout to Shareholders
Dividend Coverage: With its reasonable payout ratio (72.4%), WSO's dividend payments are covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: WSO's dividends in 3 years are forecast to be covered by earnings (71.5% payout ratio).
How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Albert Nahmad (80 yo)
Mr. Albert H. Nahmad has been the Chief Executive Officer of Watsco, Inc. since December 1972. Mr. Nahmad is a General Partner of Alna Capital Associates. Mr. Nahmad served as President of Watsco, Inc. fro...
CEO Compensation Analysis
Compensation vs Market: Albert's total compensation ($USD10.69M) is about average for companies of similar size in the US market ($USD11.15M).
Compensation vs Earnings: Albert's compensation has been consistent with company performance over the past year.
Experienced Management: WSO's management team is seasoned and experienced (14 years average tenure).
Experienced Board: WSO's board of directors are considered experienced (3.6 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Watsco, Inc.'s employee growth, exchange listings and data sources
- Name: Watsco, Inc.
- Ticker: WSO
- Exchange: NYSE
- Founded: 1945
- Industry: Trading Companies and Distributors
- Sector: Capital Goods
- Market Cap: US$10.221b
- Shares outstanding: 35.40m
- Website: https://www.watsco.com
Number of Employees
- Watsco, Inc.
- 2665 South Bayshore Drive
- Suite 901
- United States
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2021/10/26 22:32|
|End of Day Share Price||2021/10/26 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.