A Business at a Glance
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Watsco, Inc. and its subsidiaries (collectively, “Watsco,” the “Company”, or “we,” “us,” or “our”) was incorporated in Florida in 1956 and is the largest distributor of air conditioning, heating and refrigeration equipment and related parts and supplies (“HVAC/R”) in the HVAC/R distribution industry in North America. At December 31, 2025, we operated from 695 locations in 43 U.S. States, Canada, Mexico and Puerto Rico with additional market coverage on an export basis to portions of Latin America and the Caribbean, through which we serve more than 130,000 active contractors that service the replacement and new construction markets. Our revenues in HVAC/R distribution have increased from $64.1 million in 1989 to $7.
| Metric | TTM | FY2025 | FY2024 | FY2023 | FY2022 | FY2021 |
|---|---|---|---|---|---|---|
| Revenue | 7.2B | 7.2B | 7.6B | 7.3B | 7.3B | 6.3B |
| Net Income | 464M | 464M | 499M | 499M | 601M | 382M |
| EPS | $12.25 | $12.25 | $13.30 | $13.67 | $15.41 | $10.78 |
| Free Cash Flow | 535M | 535M | 743M | 526M | 536M | 324M |
| ROIC | 19.3% | 23.7% | 26.0% | 28.3% | 34.6% | 28.0% |
| Gross Margin | 28.0% | 28.0% | 26.8% | 27.4% | 27.9% | 26.6% |
| Debt/Equity | 0.17 | 0.17 | 0.17 | 0.19 | 0.18 | 0.28 |
| Dividends/Share | $12.50 | $11.70 | $10.55 | $9.80 | $8.55 | $7.63 |
| Operating Income | 720M | 720M | 782M | 795M | 832M | 629M |
| Operating Margin | 10.0% | 10.0% | 10.3% | 10.9% | 11.4% | 10.0% |
| ROE | 16.7% | 17.1% | 20.4% | 24.2% | 33.8% | 24.2% |
| Shares Outstanding | 38M | 38M | 38M | 37M | 39M | 35M |
WATSCO INC passes 7 of 9 quality checks, indicating strong fundamentals.
WATSCO INC trades at 34.0x trailing earnings, compared to its 15-year median P/E of 24.2x, suggesting it is currently Expensive relative to its historical range. On a free-cash-flow basis, the stock trades at 27.2x vs a median of 19.9x. The company's 5-year average ROIC is 28.1% with a gross margin of 27.3%. Total shareholder yield (dividends) is 3.0%. At current prices, the estimated annualized return to fair value is +15.2%.
WATSCO INC (WSO) has a current P/E ratio of 34.0, compared to its historical median P/E of 24.2. The stock is currently considered Expensive based on its historical valuation range.
WATSCO INC (WSO) has a 5-year average return on invested capital (ROIC) of 28.1%. This indicates strong capital allocation and a potential competitive advantage.
WATSCO INC (WSO) has a market capitalization of $15.8B. It is classified as a large-cap stock.
Yes, WATSCO INC (WSO) pays a dividend with a trailing twelve-month yield of 3.00%.
Based on historical P/E analysis, WATSCO INC (WSO) appears expensive. The current P/E of 34.0 is 41% above its historical median of 24.2. The estimated fair value CAGR (P/E method) is 15.1%.
WATSCO INC (WSO) operates in the Wholesale-Hardware & Plumbing & Heating Equipment & Supplies industry, within the Consumer Cyclical sector.
WATSCO INC (WSO) reported annual revenue of $7.2 billion in its most recent fiscal year, based on SEC EDGAR filings.
WATSCO INC (WSO) has a net profit margin of 6.4%. This is a modest margin.
WATSCO INC (WSO) generated $535 million in free cash flow in its most recent fiscal year. Positive free cash flow supports dividends, buybacks, and debt reduction.
WATSCO INC (WSO) has a debt-to-equity ratio of 0.17. This indicates a conservatively financed balance sheet.
WATSCO INC (WSO) reported earnings per share (EPS) of $12.25 in its most recent fiscal year.
WATSCO INC (WSO) has a return on equity (ROE) of 17.1%. This indicates the company generates strong returns for shareholders.
WATSCO INC (WSO) has a 5-year average gross margin of 27.3%. This lower margin is typical of capital-intensive or commodity businesses.
The Ledger Terminal provides 18 years of financial data for WATSCO INC (WSO), sourced directly from SEC EDGAR filings. This includes income statements, balance sheets, cash flow statements, and key financial ratios.
WATSCO INC (WSO) has a book value per share of $73.40, based on its most recent annual SEC filing.
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