Market Cap
US$6.3b
Last Updated
2020/07/02 23:55 UTC
Data Sources
Company Financials +
Executive Summary
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.
Rewards
Risk Analysis
Dividend of 3.95% is not well covered by earnings or forecast to be in the next 3 years
Snowflake Analysis
Flawless balance sheet with questionable track record.
Similar Companies
Share Price & News
How has Watsco's share price performed over time and what events caused price changes?
Latest Share Price and Events
Stable Share Price: WSO has not had significant price volatility in the past 3 months.
Market Performance
7 Day Return
5.0%
WSO
3.5%
US Trade Distributors
1.6%
US Market
1 Year Return
9.7%
WSO
-0.6%
US Trade Distributors
4.8%
US Market
Return vs Industry: WSO exceeded the US Trade Distributors industry which returned -0.6% over the past year.
Return vs Market: WSO exceeded the US Market which returned 4.8% over the past year.
Shareholder returns
| WSO | Industry | Market | |
|---|---|---|---|
| 7 Day | 5.0% | 3.5% | 1.6% |
| 30 Day | 1.1% | 0.9% | 2.3% |
| 90 Day | 22.0% | 43.0% | 29.5% |
| 1 Year | 14.1%9.7% | 1.3%-0.6% | 7.1%4.8% |
| 3 Year | 29.7%16.2% | 20.4%14.6% | 37.1%28.1% |
| 5 Year | 71.0%45.2% | 30.2%20.5% | 67.2%48.6% |
Price Volatility Vs. Market
How volatile is Watsco's share price compared to the market and industry in the last 5 years?
Simply Wall St News
23 hours ago | Simply Wall St
Is Watsco, Inc.'s (NYSE:WSO) Recent Stock Performance Influenced By Its Fundamentals In Any Way?2 weeks ago | Simply Wall St
This Insider Has Just Sold Shares In Watsco, Inc. (NYSE:WSO)1 month ago | Simply Wall St
Here's Why Watsco (NYSE:WSO) Can Manage Its Debt ResponsiblyValuation
Is Watsco undervalued compared to its fair value and its price relative to the market?
28.33x
Price to Earnings (PE) ratio
Share Price vs. Fair Value
Below Fair Value: WSO ($179.69) is trading above our estimate of fair value ($119.9)
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 (28.3x) compared to the Trade Distributors industry average (15.4x).
PE vs Market: WSO is poor value based on its PE Ratio (28.3x) compared to the US market (16.5x).
Price to Earnings Growth Ratio
PEG Ratio: WSO is poor value based on its PEG Ratio (5.6x)
Price to Book Ratio
PB vs Industry: WSO is overvalued based on its PB Ratio (4.5x) compared to the US Trade Distributors industry average (1.2x).
Next Steps
Future Growth
How is Watsco forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?
5.0%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: WSO's forecast earnings growth (5% per year) is above the savings rate (2.2%).
Earnings vs Market: WSO's earnings (5% per year) are forecast to grow slower than the US market (22.8% per year).
High Growth Earnings: WSO's earnings are forecast to grow, but not significantly.
Revenue vs Market: WSO's revenue (2.2% per year) is forecast to grow slower than the US market (9.3% per year).
High Growth Revenue: WSO's revenue (2.2% 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 low in 3 years time (16.2%).
Next Steps
Past Performance
How has Watsco performed over the past 5 years?
9.7%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: WSO has high quality earnings.
Growing Profit Margin: WSO's current net profit margins (4.6%) are lower than last year (4.9%).
Past Earnings Growth Analysis
Earnings Trend: WSO's earnings have grown by 9.7% per year over the past 5 years.
Accelerating Growth: WSO's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.
Earnings vs Industry: WSO had negative earnings growth (-0.5%) over the past year, making it difficult to compare to the Trade Distributors industry average (-9.9%).
Return on Equity
High ROE: WSO's Return on Equity (17.1%) is considered low.
Next Steps
Financial Health
How is Watsco's financial position?
Financial Position Analysis
Short Term Liabilities: WSO's short term assets ($1.6B) exceed its short term liabilities ($520.5M).
Long Term Liabilities: WSO's short term assets ($1.6B) exceed its long term liabilities ($378.5M).
Debt to Equity History and Analysis
Debt Level: WSO's debt to equity ratio (9.3%) is considered satisfactory.
Reducing Debt: WSO's debt to equity ratio has reduced from 30.5% to 9.3% over the past 5 years.
Debt Coverage: WSO's debt is well covered by operating cash flow (207.9%).
Interest Coverage: WSO's interest payments on its debt are well covered by EBIT (85.7x coverage).
Balance Sheet
Next Steps
Dividend
What is Watsco current dividend yield, its reliability and sustainability?
3.95%
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: WSO's dividend (3.95%) is higher than the bottom 25% of dividend payers in the US market (1.67%).
High Dividend: WSO's dividend (3.95%) is low compared to the top 25% of dividend payers in the US market (4.51%).
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 high payout ratio (100.9%), WSO's dividend payments are not well covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: WSO's dividends in 3 years are not forecast to be well covered by earnings (121.9% payout ratio).
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
6.3yrs
Average management tenure
CEO
Albert Nahmad (79yo)
47.58yrs
Tenure
US$11,204,097
Compensation
Mr. Albert H. Nahmad has been the Chief Executive Officer of Watsco Inc. since December 1972. Mr. Nahmad is a General Partner of Alna Capital Associates. Mr. Nahmad served as President of Watsco Inc. from ...
CEO Compensation Analysis
Compensation vs Market: Albert's total compensation ($USD11.20M) is above average for companies of similar size in the US market ($USD7.32M).
Compensation vs Earnings: Albert's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.
Leadership Team
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| Chairman & CEO | 47.58yrs | US$11.20m | 4.66% $294.4m | |
| President & Director | 8.67yrs | US$4.35m | 0.58% $36.5m | |
| CFO & Treasurer | 16.67yrs | US$303.10k | 0.33% $20.7m | |
| Executive VP & COO | 1.25yrs | US$997.18k | 0.022% $1.4m | |
| Executive VP of Planning & Strategy and Secretary | 0.83yr | US$374.95k | 0.65% $41.0m | |
| Chief Technology Officer | 8.92yrs | no data | no data | |
| Executive Vice President | 6.33yrs | US$872.05k | no data | |
| Vice President of Corporate Development | no data | no data | no data |
6.3yrs
Average Tenure
62yo
Average Age
Experienced Management: WSO's management team is seasoned and experienced (6.3 years average tenure).
Board Members
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| Chairman & CEO | 47.58yrs | US$11.20m | 4.66% $294.4m | |
| President & Director | 8.67yrs | US$4.35m | 0.58% $36.5m | |
| Independent Co-Vice Chairman of the Board | no data | US$75.54k | no data | |
| Co-Vice Chairman of the Board & Lead Independent Director | no data | US$75.54k | 0.065% $4.1m | |
| Independent Director | 4.67yrs | US$105.76k | 0.021% $1.3m | |
| Independent Director | 2.33yrs | US$105.76k | 0.0089% $559.9k | |
| Independent Director | 13.5yrs | US$195.97k | 0.021% $1.3m | |
| Independent Director | 2.33yrs | US$105.76k | no data | |
| Independent Director | 1.58yrs | US$75.54k | no data | |
| Member of Advisory Board | 1yr | no data | no data |
3.5yrs
Average Tenure
72yo
Average Age
Experienced Board: WSO's board of directors are considered experienced (3.5 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: WSO insiders have only sold shares in the past 3 months.
Recent Insider Transactions
Ownership Breakdown
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Top Shareholders
Company Information
Watsco, Inc.'s company bio, employee growth, exchange listings and data sources
Key Information
- Name: Watsco, Inc.
- Ticker: WSO
- Exchange: NYSE
- Founded: 1945
- Industry: Trading Companies and Distributors
- Sector: Capital Goods
- Market Cap: US$6.312b
- Shares outstanding: 35.17m
- Website: https://www.watsco.com
Number of Employees
Location
- Watsco, Inc.
- 2665 South Bayshore Drive
- Suite 901
- Miami
- Florida
- 33133
- United States
Listings
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| WSO.B | NYSE (New York Stock Exchange) | Class B Common Stock | US | USD | Apr 1968 | |
| WSO | NYSE (New York Stock Exchange) | Yes | Common Stock | US | USD | Jun 1984 |
| WC3 | DB (Deutsche Boerse AG) | Yes | Common Stock | DE | EUR | Jun 1984 |
Biography
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; 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 material, refrigerants, ductwork, grills, registers, sheet metal, tools, copper tubing, concrete pads, tapes, adhesives, and other ancillary supplies. It serves contractors and dealers that service the replacement and new construction markets for residential and light commercial central air conditioning, heating, and refrigeration systems. In addition, the company exports its products to Latin America and the Caribbean Basin. Watsco, Inc. was founded in 1945 and is headquartered in Miami, Florida.
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2020/07/02 23:55 |
| End of Day Share Price | 2020/07/02 00:00 |
| Earnings | 2020/03/31 |
| Annual Earnings | 2019/12/31 |
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.