# Watsco Inc. (WSO) fundamentals

Data as of 2026-09-08. NYSE, United States. Sector: Industrials / Trading Companies & Distributors. Price $315.13, market value $13.0 billion.

## Valuation
- **P/E (trailing): 27.0×** (5-yr avg 26.0×, 3-yr avg 29.9×). Watsco Inc. trades at 27.0× trailing earnings, close to its own five-year average of 26.0×. The Industrials median in the September 2026 study was 25.7×. Forward P/E is 23.7×, lower than trailing, so analysts expect earnings to grow.
- **Price / sales: 1.8×**. Each dollar of revenue is priced at 1.8×.
- **Price / book: 4.1×**. The shares trade at 4.1× book value; book value is a meaningful part of the valuation.
- **EV / EBITDA: 17.9×**. Enterprise value is 17.9× operating earnings before depreciation, the multiple that ignores how the company is financed.
- **Free-cash-flow yield: 5.4%** (5-yr avg 3.9%). Free cash flow equals 5.4% of the market value, above its five-year average of 3.9%, so the shares are cheaper on cash than they have usually been. Above 5% is generally attractive.
- **Earnings yield: 3.7%**. The inverse of the P/E: 3.7% of the price is earned each year.

## Profitability
- **Gross margin: 27.5%**. Watsco Inc. keeps 27.5% of revenue after the direct cost of what it sells.
- **Operating margin: 9.4%**. 9.4% of revenue is left after running the business.
- **Net margin: 6.9%**. 6.9% of each dollar of sales reaches the bottom line.
- **Return on equity: 17.9%**. 17.9% on shareholders' equity is solid.
- **Return on invested capital: 19.1%**. Return on all capital, debt included, is 19.1%: comfortably above what that capital costs.
- **Return on assets: 10.8%**. Each dollar of assets produces 10.8% of profit.

## Growth
- **Revenue growth (1 yr): -5.0%** (3-yr -0.2%/yr, 5-yr 7.4%/yr). Revenue fell 5.0% over the last year, against 7.4% a year compounded over five years: growth is slowing.
- **EPS growth (1 yr): -7.9%** (3-yr -7.4%/yr, 5-yr 11.8%/yr). Earnings per share fell 7.9%, roughly in step with revenue.
- **Free-cash-flow growth (3 yr): -0.1%/yr**. Free cash flow has compounded at -0.1% a year over three years, keeping pace with earnings: the growth is real cash.

## Financial health
- **Debt to equity: 0.17**. Debt is 0.17 times equity: a conservative balance sheet.
- **Net debt / EBITDA: 0.1×**. It would take 0.1 years of operating earnings to repay net borrowings, within the comfortable range.
- **Current ratio: 4.12** (quick 4.12). Current assets cover the next year's liabilities 4.12 times.
- **Piotroski F-score: 5/9**. 5 of 9 checks pass: mixed.

## Dividends
- **Dividend yield: 4.19%** ($12.30 per share, trailing). Watsco Inc. yields 4.19%, an income-level yield.
- **Payout ratio: 95%** (72% of free cash flow). 95% of earnings goes out as dividends, leaving a thin cushion.
- **Consecutive years of increases: 12**. 12 straight years of increases, a record that survived at least one recession.
- **Dividend growth (5 yr): 11.1%/yr** (1-yr 10.9%). The dividend has compounded at 11.1% a year over five years, doubling roughly every 7 years at that pace.

## Analyst view
- **Analyst consensus: hold** (10 analysts). 10 analysts cover Watsco Inc.; the consensus is hold, with an average price target of $379.00 (+20% from the current price). Analyst opinion is shown for context; it is not part of the Fundamental Score.

## Price and momentum
- **Total return (1 yr): -19.3%** (YTD -4.2%, 3-mo -14.4%). The shares are down 19.3% over twelve months including dividends.
- **From 52-week high: -31.3%** (6.6% above the low). Trading 31% below its 52-week high, deep in a drawdown.
- **200-day average: below**. The price sits below its 200-day moving average, the usual definition of a downtrend.
- **RSI (14-day): 45**. An RSI of 45 is neutral.
- **Beta (1 yr): 1.12** (volatility 35%). Beta of 1.12 against the S&P 500: the shares move roughly with the market.

Live score and charts: https://foliofundamentals.com/analyzer?s=WSO · Page: https://foliofundamentals.com/stocks/wso

Not investment advice.